[Federal Register Volume 62, Number 30 (Thursday, February 13, 1997)]
[Proposed Rules]
[Pages 6739-6746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3328]


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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Parts 401 and 457


Common Crop Insurance Regulations, Onion Crop Insurance 
Provisions; and Onion Endorsement

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of onions. 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 onion 
endorsement with the Common Crop Insurance Policy for ease of use and 
consistency of terms, and to restrict the effect of the current Onion 
Endorsement to the 1997 and prior crop years.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business March 17, 1997, and will be 
considered when the rule is to be made final. The comment period for 
information collections under the Paperwork Reduction Act of 1995 
continues through April 14, 1997.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Product Development Branch, Federal Crop Insurance 
Corporation, United States Department of Agriculture, 9435 Holmes Road, 
Kansas City, MO 64131. Written comments will be available for public 
inspection and copying in room 0324, South Building, United States 
Department of Agriculture, 14th and Independence Avenue, SW., 
Washington, DC., 8:15-4:45, est, Monday through Friday, except 
holidays.

FOR FURTHER INFORMATION CONTACT: Bill Klein, Program Analyst, Research 
and Development Division, Product Development Branch, Federal Crop 
Insurance Corporation, at the Kansas City, MO, address listed above, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be exempt for the purposes of Executive Order No. 12866 and, 
therefore, has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Onion Crop Insurance Provisions.'' The 
information to be collected includes a crop insurance application and 
an acreage report. Information collected from the application and 
acreage report is electronically submitted to FCIC by the reinsured 
companies. Potential respondents to this information collection are 
producers of onions that are eligible for Federal crop insurance.
    The information requested is necessary for the insurance company 
and FCIC to provide insurance and reinsurance, determine eligibility, 
determine the correct parties to the agreement or contract, determine 
and collect premiums or other monetary amounts, and pay benefits.
    All information is reported annually. The reporting burden for this 
collection of information is estimated to average 16.9 minutes per 
response for each of the 3.6 responses from approximately 1,242,510 
respondents. The total annual burden on the public for this information 
collection is 1,889,363 hours.
    FCIC is requesting comments on the following: (a) Whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
agency's estimate of the burden of the proposed collection of 
information; (c) ways to enhance the quality, utility, and clarity of 
the information to be

[[Page 6740]]

collected; and (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information gathering 
technology.
    Comments regarding paperwork reduction should be submitted to the 
Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, DC. 20503.
    The Office of Management and Budget (OMB) is required to make a 
decision concerning the collections of information contained in these 
proposed regulations between 30 and 60 days after submission to OMB. 
Therefore, a comment to OMB is best assured of having full effect if 
OMB receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed regulation.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. This rule contains no Federal 
mandates (under the regulatory provisions of Title II of the UMRA) for 
State, local, and tribal governments or the private sector. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

Executive Order 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 impact on a substantial 
number of small entities. New provisions included in this rule will not 
impact small entities to a greater extent than large 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. The insured 
must also annually certify to the number of acres and the previous 
years production, if adequate records are available to support the 
certification, or receive a transitional yield. The producer must 
maintain the production records to support the certification 
information for at least three years. 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. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 12778. The provisions of this rule will 
not have retroactive effect prior to the effective date. The provisions 
of this rule will preempt State and local laws to the extent such state 
and local laws are inconsistent herewith. The administrative appeal 
provisions published at 7 CFR part 11 must be exhausted before any 
action for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    FCIC proposes to add to the Common Crop Insurance Regulations (7 
CFR part 457), a new section, 7 CFR 457.135, Onion Crop Insurance 
Provisions. The new provisions will be effective for the 1998 and 
succeeding crop years. These provisions will replace and supersede the 
current provisions for insuring onions found at 7 CFR 401.126. FCIC 
also proposes to amend 401.126 to limit its effect to the 1997 and 
prior crop years. FCIC will later publish a regulation to remove and 
reserve Sec. 401.126
    This rule makes minor editorial and format changes to improve the 
Onion Endorsement's compatibility with the Common Crop Insurance 
Policy. In addition, FCIC is proposing substantive changes in the 
provisions for insuring onions as follows:
    1. Section 1--Add definitions for the terms ``crop year,'' 
``days,'' ``direct marketing,'' ``FSA,'' ``final planting date,'' 
``good farming practices,'' ``hundredweight,'' ``interplanted,'' 
``irrigated practice,'' ``late planted,'' ``late planting period,'' 
``lifting or digging,'' ``non-storage onions,'' ``planted acreage,'' 
``practical to replant,'' ``prevented planting,'' ``production 
guarantee (per acre),'' ``replanting,'' ``storage onions,'' ``timely 
planted,'' ``topping,'' ``type,'' and ``written agreement,'' for 
clarification. Add the definition of ``onion production'' to clearly 
identify production to count for harvested and unharvested onions. 
Current provisions do not provide this definition.
    2. Section 3(b)--Add provisions that allow insurance for the onion 
crop in three stages and provide the percentage of coverage and the 
qualifications for each stage. Guarantees by stage will reduce 
indemnities to reflect lower out-of-pocket production costs when a crop 
loss occurs early in the growing season.
    3. Section 4--Add a June 30 contract change date for states and 
counties with an August 31 cancellation date and change the contract 
change date to November 30 preceding the cancellation date for the 
other states and counties. This maintains an adequate time period 
between this date and the cancellation date revised to correspond to 
the change in the sales closing date and comply with the Federal Crop 
Insurance Reform Act of 1994, and allows producers sufficient time to 
make informed risk management decisions. The current contract change 
date is December 31.
    4. Section 5--Add an August 31 cancellation and termination date 
for states and counties with fall seeded non-storage type onions. The 
cancellation and termination dates have been changed to February 1 for 
all other onions in all states and counties. These changes are intended 
to minimize program vulnerabilities which may exist

[[Page 6741]]

because insureds may be able to anticipate unfavorable growing 
conditions and obtain indemnities to which they might otherwise not be 
entitled.
    5. Section 6--Revise the annual premium section to clarify that the 
premium is based on the third stage production guarantee.
    6. Section 7(b)--Add non-storage type onions as an insured crop to 
provide crop insurance protection for producers of this commodity.
    7. Section 7(c) (1) and (2)--Add provisions allowing insurance for 
onions interplanted with a windbreak crop to protect the onion plants 
when they are small and tender. This is a standard practice in certain 
areas of the country which have sandy soils and frequently experience 
strong winds. This section also allows insurance for onions 
interplanted into a grass or legume provided this practice would not 
adversely affect the amount or quality of the production.
    8. Section 8(a)--Clarify that acreage of the onion crop is not 
insurable if it does not meet the stated rotation requirements, unless 
different rotational requirements are shown on the Special Provisions 
or we agree in writing to insure the acreage.
    9. Section 8(b)--Clarify that any acreage damaged prior to the 
final planting date must be replanted unless the insurance provider 
agrees that it is not practical to replant.
    10. Section 9(b)(1)--Add dates for the end of insurance period for 
fall planted non-storage onions in Georgia, Oregon, and Texas, and for 
spring planted non-storage onions. The date for the end of insurance 
period in Colorado was changed from September 30 to October 15, since 
it is a normal practice to harvest onions after September 30.
    11. Section 9(b)(2)--Specify the end of insurance period as 2 days 
after lifting or digging of non-storage onions and 14 days after 
lifting or digging of storage type onions to allow appropriate time for 
field drying without creating an unacceptable risk to the insurance 
provider.
    12. Section 10(a) (3)and (4)--Add provisions to clarify that any 
losses caused by insufficient or improper application of pest or 
disease control measures are not an insured cause of loss.
    13. Section 10(b)--Add provisions to clarify that we do not insure 
against any loss of production due to damage that occurs or becomes 
evident after the end of the insurance period, including, but not 
limited to, damage that occurs after the onions have been placed in 
storage.
    14. Section 11--Add provisions to allow producers to receive a 
replanting payment when it is considered practical to replant. 
Provisions are also added which provide that replanting with a practice 
that is uninsurable as an original planting will cause the liability 
for the unit to be reduced by the amount of the replanting payment.
    15. Section 12(b)--Require the producer to give notice at least 15 
days prior to harvest so a preharvest inspection can be made if 
production is to be sold by direct marketing. This appraisal may be 
used to determine the amount of production to count.
    16. Section 13(b)--Remove the provision that required multiplying 
the total production to be counted by the greater of the local market 
price at the time the onions are appraised or by the respective price 
election. When the onion insurance was originally offered this language 
was considered necessary due to the extreme swings in the market price. 
The market appears to be less volatile today, and the ``greater of'' 
language can result in a hardship to producers when they have appraised 
production that is valued at the local market price, and that price is 
considerably higher than their price election. The new provision 
requires multiplying the total production to be counted of each type, 
if applicable, by the respective price election the producer chose.
    17. Section 13(d)--Add provisions that allow for no production to 
be counted for the unit or portion of a unit if the appraised percent 
of damage exceeds the percentage shown by type in the Special 
Provisions, unless onions from that acreage are subsequently harvested 
and sold.
    18. Section 13(e)--Add provisions to clarify that the extent of 
damage must be determined not later than the time onions are placed in 
storage, if the production is stored prior to sale, or the date they 
are delivered to a packer, processor, or other handler if the 
production is not stored.
    19. Section 14--Add late and prevented planting provisions to the 
policy. This insurance coverage was previously only provided by the 
execution of a separate Late Planting Agreement Option. To ease the 
administrative burden, this coverage is now included in the policy and 
the premium included in the premium owed for the unit.
    20. Section 15--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long standing policy of permitting 
certain modifications of the insurance contract by written agreement 
for some policies. This amendment allows FCIC to tailor the policy to a 
specific insured in certain instances. The new section will cover 
application for and duration of written agreements.

List of Subjects in 7 CFR Parts 401 and 457

    Crop Insurance, Onion Endorsement, Onion.

Proposed Rule

    For the reasons set forth in the preamble, the Federal Crop 
Insurance Corporation hereby proposes to amend 7 CFR parts 401 and 457, 
as follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE 
1988 AND SUBSEQUENT CONTRACT YEARS

    1. The authority citation for 7 CFR part 401 continues to read as 
follows:

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

    2. The introductory text of Sec. 401.126 is revised to read as 
follows:


Sec. 401.126  Onion Endorsement.

    The provisions of the Onion Endorsement for the 1988 through 1997 
crop years are as follows:
* * * * *

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

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

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

    4. Section 457.135 is added to read as follows:

Sec. 457.135  Onion Crop Insurance Provisions.

    The Onion 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:

ONION CROP PROVISIONS

    If a conflict exists among the Basic Provisions (Sec. 457.8), 
these Crop Provisions, and the Special Provisions, the Special 
Provisions will control these Crop Provisions and the Basic 
Provisions, and these Crop Provisions will control the Basic 
Provisions.

1. Definitions

    Crop year--The time period in which the onions are normally 
grown and designated by the calendar year in which the onions are 
normally harvested.

[[Page 6742]]

    Days--Calendar days.
    Direct marketing--Sale of the insured crop directly to consumers 
without the intervention of an intermediary such as a wholesaler, 
retailer, packer, processor, shipper or buyer. Examples of direct 
marketing include selling through an on-farm or roadside stand, 
farmer's market, and permitting the general public to enter the 
field for the purpose of harvesting all or a portion of the crop.
    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture or a successor Agency.
    Final planting date--The date contained in the Special 
Provisions for the insured crop by which the crop must initially be 
planted in order to be insured for the full production guarantee.
    Good farming practices--The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity 
and produce at least the yield used to determine the production 
guarantee and are those recognized by the Cooperative State 
Research, Education, and Extension Service as compatible with 
agronomic and weather conditions in the county.
    Harvest--Removal of the onions from the field after topping and 
lifting or digging.
    Hundredweight--100 pounds avoirdupois.
    Interplanted--Acreage on which two or more crops are planted in 
a manner that does not permit separate agronomic maintenance or 
harvest of the insured crop.
    Irrigated practice--A method of producing a crop by which water 
is artificially applied during the growing season by appropriate 
systems and at the proper times, with the intention of providing the 
quantity of water needed to produce at least the yield used to 
establish the irrigated production guarantee on the irrigated 
acreage planted to the insured crop.
    Late planted--Acreage planted to the insured crop during the 
late planting period.
    Late planting period--The period that begins the day after the 
final planting date for the insured crop and ends 25 days after the 
final planting date.
    Lifting or digging--A pre-harvest process in which the onion 
roots are severed from the soil and the onion bulbs laid on the 
surface of the soil for drying in the field.
    Non-storage onions--Generally of a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties, which are dried 
only a short time, and consequently have a higher moisture content. 
They are thinner skinned, contain a higher sugar content, and are 
generally milder in flavor than storage type onions. Due to a higher 
moisture and sugar content, they are subject to deterioration both 
on the surface and internally if they are not used shortly after 
harvest.
    Onion production--All onions of recoverable size and condition, 
with excess dirt and foliage material removed, and of storable or 
marketable condition, commonly called ``first net weight.'' In 
addition to small onions lost during harvesting and initial 
cleaning, the Special Provisions may specify a minimum onion size, 
based on the ``U.S. or other Standards for Repacked Onions,'' to be 
used to determine onion production to count.
    Planted acreage--Land in which seed or onion plants have been 
placed by a machine appropriate for the insured crop and planting 
method, or in which onion plants have been transplanted by hand, at 
the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Onions must 
initially be planted in rows to be considered planted.
    Practical to replant--In lieu of the definition of ``Practical 
to replant'' contained in section 1 of the Basic Provisions 
(Sec. 457.8), practical to replant is defined as our determination, 
after loss or damage to the insured crop, based on factors, 
including but not limited to moisture availability, condition of the 
field, time to crop maturity, and marketing window, that replanting 
the insured crop will allow the crop to attain maturity prior to the 
calendar date for the end of the insurance period. It will not be 
considered practical to replant after the end of the late planting 
period unless replanting is generally occurring in the area.
    Prevented planting--Inability to plant the insured crop with 
proper equipment by the final planting date designated in the 
Special Provisions for the insured crop in the county or the end of 
the late planting period. You must have been unable to plant the 
insured crop due to an insured cause of loss that has prevented the 
majority of producers in the surrounding area from planting the same 
crop.
    Production guarantee (per acre):
    (a) First stage production guarantee--Thirty-five percent of the 
third stage production guarantee.
    (b) Second stage production guarantee--Sixty percent of the 
third stage production guarantee.
    (c) Third stage production guarantee--The quantity of onions (in 
hundredweight) determined by multiplying the approved yield per acre 
by the coverage level percentage you elect.
    Replanting--Performing the cultural practices necessary to 
replace the onion seed or onion transplants, and then replacing the 
onion seed or onion transplants in the insured acreage with the 
expectation of growing a successful crop.
    Storage onions--Onions other than a Bermuda, Granex, or Grano 
variety, or hybrids developed from these varieties which are dried 
to a lower moisture content, are firmer, have more outer layers of 
paper-like skin, and are darker in color than non-storage onions. 
They are generally more pungent, have a lower sugar content, and can 
normally be stored for several months under proper conditions prior 
to use without deterioration.
    Timely planted--Planted on or before the final planting date 
designated in the Special Provisions for the insured crop in the 
county.
    Topping--A pre-harvest process to initiate curing, in which 
onion foliage is removed or bent over.
    Type--A category of onions as identified in the Special 
Provisions.
    Written agreement--A written document that alters designated 
terms of this policy in accordance with section 15.

2. Unit Division

    (a) Unless limited by the Special Provisions, a unit as defined 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
(basic unit) may be divided into optional units if, for each 
optional unit you meet all the conditions of this section or if a 
written agreement to such division exists.
    (b) Basic units may not be divided into optional units on any 
basis other than as described in this section.
    (c) If you do not comply fully with these provisions, we will 
combine all optional units that are not in compliance with these 
provisions into the basic unit from which they were formed. We will 
combine the optional units at any time we discover that you have 
failed to comply with these provisions. If failure to comply with 
these provisions is determined to be inadvertent, and the optional 
units are combined into a basic unit, that portion of the additional 
premium paid for the optional units that have been combined will be 
refunded to you.
    (d) All optional units you selected for the crop year must be 
identified on the acreage report for that crop year.
    (e) The following requirements must be met for each optional 
unit:
    (1) You must have records, which can be independently verified, 
of planted acreage and production for each optional unit for at 
least the last crop year used to determine your production 
guarantee;
    (2) You must plant the crop in a manner that results in a clear 
and discernable break in the planting pattern at the boundaries of 
each optional unit;
    (3) You must have records of marketed production or measurement 
of stored production from each optional unit maintained in such a 
manner that permits us to verify the production from each optional 
unit, or the production from each unit must be kept separate until 
after loss adjustment is completed by us; and
    (4) Optional units meet one or more of the following, as 
applicable:
    (i) Optional Units Based on Irrigated Acreage or Non-Irrigated 
Acreage To qualify as separate irrigated and non-irrigated optional 
units, the non-irrigated acreage may not continue into the irrigated 
acreage in the same rows or planting pattern. The irrigated acreage 
may not extend beyond the point at which the irrigation system can 
deliver the quantity of water needed to produce the yield on which 
your guarantee is based, except the corners of a field in which a 
center-pivot irrigation system is used will be considered as 
irrigated acreage if separate acceptable records of production from 
the corners are not provided. If the corners of a field in which the 
center pivot irrigation system is used do not qualify as a separate 
non-irrigated optional unit, they will be a part of the unit 
containing the irrigated acreage. However, non-irrigated acreage 
that is not a part of a field in which a center pivot irrigation 
system is used may qualify as a separate optional unit provided all 
requirements of this section are met; or
    (ii) Optional Units Based on Onion Type To qualify for a 
separate optional unit by type, the onions must be designated by 
type in the Special Provisions.

[[Page 6743]]

3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities

    (a) In addition to the requirements of section 3 (Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities) 
of the Basic Provisions (Sec. 457.8), you may select only one price 
election for all the onions 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 onion 
type designated in the Special Provisions. The price elections you 
choose for each type must have the same percentage relationship to 
the maximum price offered by us for each type. For example, if you 
choose 100 percent of the maximum price election for one type, you 
must also choose 100 percent of the maximum price election for all 
other types.
    (b) The production guarantees in the actuarial table are the 
third stage guarantees. The stages are:
    (1) First stage extends from planting until the emergence of the 
third leaf for direct seeded onions.
    (2) Second stage extends from emergence of the fourth leaf for 
direct seeded onions, or from transplanting of onion plants, until 
25 percent of the acreage in the unit has been subjected to topping 
and lifting or digging.
    (3) Third stage extends from the completion of topping and 
lifting or digging on more than 25 percent of the applicable acreage 
in the unit until the end of the insurance period.
    (c) The production guarantee will be expressed in hundredweight.
    (d) Any acreage of onions damaged in the first or second stage, 
to the extent that producers in the area would not normally further 
care for the onions, will be deemed to have been destroyed even 
though you may continue to care for the onions. The production 
guarantee for such acreage will not exceed the production guarantee 
for the stage in which the damage occurred.

4. Contract Changes

    In accordance with section 4 (Contract Changes) of the Basic 
Provisions (Sec. 457.8)), the contract change date is June 30 
preceding the cancellation date for counties with an August 31 
cancellation date and November 30 preceding the cancellation date 
for all other counties.

5. Cancellation and Termination Dates

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

------------------------------------------------------------------------
                                           Cancellation and termination 
            State and county                           date             
------------------------------------------------------------------------
All Georgia Counties; Umatilla County,   August 31.                     
 Oregon; Kinney, Uvalde, Medina, Bexar,                                 
 Wilson, Karnes, Bee, and San Patricio,                                 
 Counties, Texas, and all Texas                                         
 Counties lying south thereof; Walla                                    
 Walla County, Washington.                                              
All other states and counties..........  February 1.                    
------------------------------------------------------------------------

6. Annual Premium

    In lieu of the provisions of section 7(c) (Annual Premium) of 
the Basic Provisions (Sec. 457.8), the annual premium amount is 
computed by multiplying the third stage production guarantee by the 
price election, times the premium rate, times the insured acreage, 
times your share at the time of planting, and times any applicable 
premium adjustment factors contained in the Actuarial Table.

7. Insured Crop

    In accordance with section 8 (Insured Crop of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the onions 
(excluding green (bunch) or seed onions, chives, garlic, leeks, and 
scallions) in the county for which a premium rate is provided by the 
actuarial table:
    (a) In which you have a share;
    (b) That are either of a storage type onion planted for harvest 
as dry onions (bulb onions) or of a non-storage type onion planted 
for harvest as partially dried fresh market bulb onions;
    (c) That are not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Interplanted with another crop unless the onions are 
interplanted with a windbreak crop and the windbreak crop is 
destroyed within 70 days after completion of seeding or 
transplanting; or
    (2) Planted into an established grass or legume.

8. Insurable Acreage

    In addition to the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8), we will not insure any acreage 
of the insured crop that:
    (a) Was planted to storage or non-storage bulb onions, green 
(bunch) onions, seed onions, chives, garlic, leeks, shallots, or 
scallions the previous year unless different rotation requirements 
are specified in the Special Provisions or we agree in writing to 
insure such acreage; or
    (b) Is damaged before the final planting date to the extent that 
the majority of producers in the area would normally not further 
care for the crop and is not replanted, unless we agree that it is 
not practical to replant.

9. Insurance Period

    (a) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the acreage must be 
planted on or before the final planting date designated in the 
Special Provisions except as allowed in section 14(c).
    (b) The insurance period ends at the earliest of:
    (1) The calendar date for the end of the insurance period as 
follows:
    (i) June 15 for Vidalia and any other fall planted, non-storage 
type onions planted in the State of Georgia;
    (ii) July 15 for 1015 Super Sweets, and any other fall planted 
non-storage type onions in the State of Texas;
    (iii) July 31 for Walla Walla Sweets, and any other fall planted 
non-storage type onions in the states of Oregon and Washington;
    (iv) August 31 for all spring planted non-storage type onions; 
and
    (v) October 15 for all other insurable onions; or
    (2) The following event for each unit or portion of a unit:
    (i) Two days after lifting or digging of non-storage type 
onions;
    (ii) Fourteen days after lifting or digging of storage type 
onions; or
    (iii) Removal of the onions from the unit.

10. Causes of Loss

    (a) In accordance with the provisions of section 12 (Causes of 
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided 
only against the following causes of loss 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 caused by an 
insured peril that occurs during the insurance period.
    (b) In addition to the causes of loss not insured against as 
listed in section 12 (Causes of Loss) of the Basic Provisions 
(Sec. 457,8), we will not insure against any loss of production due 
to damage that occurs or becomes evident after the end of the 
insurance period, including, but not limited to, damage that occurs 
after onions have been placed in storage.

11. Replanting Payment

    (a) In accordance with section 13 (Replanting Payment) of the 
Basic Provisions (Sec. 457.8), a replanting payment is allowed if 
the crop is damaged by an insurable cause of loss to the extent that 
the remaining stand will not produce at least 90 percent of the 
third stage production guarantee for the acreage and we determine 
that it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will 
be the lesser of 7 percent of the third stage production guarantee 
or 18 hundredweight, multiplied by your price election, multiplied 
by your insured share.
    (c) When onions are replanted using a practice that is 
uninsurable as an original planting, the liability for the unit will 
be reduced by the amount of the replanting payment. The premium 
amount will not be reduced.

12. Duties in the Event of Damage or Loss

    (a) In accordance with the requirements of section 14 (Duties in 
the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), 
the representative samples of the unharvested

[[Page 6744]]

crop must be at least 10 feet wide and extend the entire length of 
each field in the unit. The samples must not be harvested or 
destroyed until the earlier of our inspection or 15 days after 
harvest of the balance of the unit is completed.
    (b) You must notify us at least 15 days before any production 
from any unit will be sold by direct marketing. We will conduct an 
appraisal that will be used to determine your production to count 
for production that is sold by direct marketing. If damage occurs 
after this appraisal we will conduct an additional appraisal. These 
appraisals, and any acceptable records provided by you, will be used 
to determine your production to count. Failure to give timely notice 
that production will be sold by direct marketing will result in an 
appraised amount of production to count that is not less than the 
production guarantee per acre if such failure results in our 
inability to make the required appraisal.

13. Settlement of Claim

    (a) We will determine your loss on a unit basis. In the event 
you are unable to provide 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, by type if applicable;
    (2) Multiplying each result of section 13(b)(1) by the 
respective price election, by type if applicable;
    (3) Totaling the results in section 13(b)(2);
    (4) Multiplying the total production to be counted of each type, 
if applicable, (see section 13(c)) by the respective price election 
you chose;
    (5) Totaling the results of section 13(b)(4);
    (6) Subtracting the result in section 13(b)(5) from the result 
in 13(b)(3); and
    (7) Multiplying the result in section 13(b)(6) by your share.
    (c) The total production (in hundredweight) to count 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 direct marketed to consumers if you fail to meet the 
requirements contained in section 12;
    (C) Put to another use without our consent;
    (D) That is damaged solely by uninsured causes; or
    (E) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested onion production (mature unharvested 
production may be adjusted based on the percent of damage in 
accordance with section 13(d));
    (iv) The appraised production that exceeds the difference 
between the first or second stage (as applicable) and the third 
stage production guarantee for acreage that does not qualify for the 
third stage guarantee, if such acreage is not subject to section 
13(c)(1) (i) and (ii); and
    (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 if you put the acreage to another use or 
abandon the crop.
    (vi) 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);
    (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; or
    (C) If due to the nature of the damage, any representative 
sample left would be likely to deteriorate further, and no agreement 
is reached, no release of the crop will be made.
    (2) All harvested onion production from the insurable acreage.
    (d) If the appraised percent of damage exceeds the percentage 
shown by type in the Special Provisions, no production will be 
counted for that unit or portion of a unit unless onions from that 
acreage are subsequently harvested and sold.
    (e) The extent of any damage must be determined not later than 
the time onions are placed in storage if the production is stored 
prior to sale, or the date they are delivered to a packer, 
processor, or other handler if production is not stored.

14. Late Planting and Prevented Planting

    (a) In lieu of provisions contained in the Basic Provisions 
(Sec. 457.8), regarding acreage initially planted after the final 
planting date and the applicability of a Late Planting Agreement 
Option, insurance will be provided for acreage planted to the 
insured crop during the late planting period (see section 14 (c)) 
and you were prevented from planting (see section 14 (d)). These 
coverages provide reduced production guarantees. The premium amount 
for late planted acreage and eligible prevented planting acreage 
will be the same as that for timely planted acreage. If the amount 
of premium you are required to pay (gross premium less our subsidy) 
for late planted acreage or prevented planting acreage exceeds the 
liability on such acreage, coverage for those acres will not be 
provided, no premium will be due, and no indemnity will be paid for 
such acreage.
    (b) If you were prevented from planting, you must provide 
written notice to us not later than the acreage reporting date.
    (c) Late Planting
    (1) For onion acreage planted during the late planting period, 
the production guarantee for each acre will be reduced for each day 
planted after the final planting date by:
    (i) One percent (1%) per day for the 1st through the 10th day; 
and
    (ii) Two percent (2%) per day for the 11th through the 25th day.
    (2) In addition to the requirements of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report the 
dates the acreage is planted within the late planting period.
    (3) If planting of onions continues after the final planting 
date, or you are prevented from planting during the late planting 
period, the acreage reporting date will be the later of:
    (i) The acreage reporting date contained in the Special 
Provisions for the insured crop; or
    (ii) Five days after the end of the late planting period.
    (d) Prevented Planting (Including Planting After the Late 
Planting Period)
    (1) If you were prevented from timely planting onions, you may 
elect:
    (i) To plant onions during the late planting period. The 
production guarantee for such acreage will be determined in 
accordance with section 14(c)(1);
    (ii) Not to plant this acreage to any crop except a cover crop 
not for harvest. You may also elect to plant the insured crop after 
the late planting period. In either case, the production guarantee 
for such acreage will be 40 percent of the production guarantee for 
timely planted acres. For example, if your production guarantee for 
timely planted acreage is 260 hundredweight per acre, your prevented 
planting production guarantee would be 104 hundredweight per acre 
(260 hundredweight multiplied by 0.40). If you elect to plant the 
insured crop after the late planting period, production to count for 
such acreage will be determined in accordance with section 13; or
    (iii) Not to plant the intended crop but plant a substitute crop 
for harvest, in which case:
    (A) No prevented planting production guarantee will be provided 
for such acreage if the substitute crop is planted on or before the 
10th day following the final planting date for the insured crop; or
    (B) A production guarantee equal to 20 percent of the production 
guarantee for timely planted acres will be provided for such 
acreage, if the substitute crop is planted after the 10th day 
following the final planting date for the insured crop. If you 
elected the Catastrophic Risk Protection Endorsement or excluded 
this coverage, and plant a substitute crop, no prevented planting 
coverage will be provided. For example, if your production guarantee 
for timely planted acreage is 260 hundredweight per acre, your 
prevented planting production guarantee would be 52 hundredweight 
per acre (260 hundredweight multiplied by 0.20). You may elect to 
exclude prevented planting coverage when a substitute crop is 
planted for harvest and receive a reduction in the applicable 
premium rate. If you wish to exclude this coverage, you must so 
indicate, on or before

[[Page 6745]]

the sales closing date, on your application or on a form approved by 
us. Your election to exclude this coverage will remain in effect 
from year to year unless you notify us in writing on our form by the 
applicable sales closing date for the crop year for which you wish 
to include this coverage. All acreage of the crop insured under this 
policy will be subject to this exclusion.
    (2) Production guarantees for timely, late, and prevented 
planting acreage within a unit will be combined to determine the 
production guarantee for the unit. For example, assume you insure 
one unit in which you have a 100 percent share. The unit consists of 
150 acres, of which 50 acres were planted timely, 50 acres were 
planted 7 days after the final planting date (late planted), and 50 
acres were not planted but are eligible for a prevented planting 
production guarantee. The production guarantee for the unit will be 
computed as follows:
    (i) For the timely planted acreage, multiply the per acre 
production guarantee for timely planted acreage by the 50 acres 
planted timely;
    (ii) For the late planted acreage, multiply the per acre 
production guarantee for timely planted acreage by 93 percent and 
multiply the result by the 50 acres planted late; and
    (iii) For prevented planting acreage, multiply the per acre 
production guarantee for timely planted acreage by:
    (A) Forty percent and multiply the result by the 50 acres you 
were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if the acreage is left idle for the 
crop year, or if a cover crop is planted not for harvest. Prevented 
planting compensation hereunder will not be denied because the cover 
crop is hayed or grazed; or
    (B) Twenty percent and multiply the result by the 50 acres you 
were prevented from planting, if the acreage is eligible for 
prevented planting coverage, and if you elect to plant a substitute 
crop for harvest after the 10th day following the final planting 
date for the insured crop (This paragraph (B) is not applicable, and 
prevented planting coverage is not available under these crop 
provisions, if you elected the Catastrophic Risk Protection 
Endorsement or you elected to exclude prevented planting coverage 
when a substitute crop is planted (see section 14(d)(1)(iii)).)
    Your premium will be based on the result of multiplying the per 
acre production guarantee for timely planted acreage by the 150 
acres in the unit.
    (3) You must have the inputs available to plant and produce the 
intended crop with the expectation of at least producing the 
production guarantee. Proof that these inputs were available may be 
required.
    (4) In addition to the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8), the insurance period 
for prevented planting coverage begins:
    (i) On the sales closing date contained in the Special Provisions 
for the insured crop in the county for the crop year the application 
for insurance is accepted; or
    (ii) For any subsequent crop year, on the sales closing date for 
the insured crop in the county for the previous crop year, provided 
continuous coverage has been in effect since that date. For example: If 
you make application and purchase insurance for onions for the 1998 
crop year, prevented planting coverage will begin on the 1998 sales 
closing date for onions in the county. If the onion coverage remains in 
effect for the 1999 crop year (is not terminated or canceled during or 
after the 1998 crop year) prevented planting coverage for the 1999 crop 
year began on the 1998 sales closing date. Cancellation for the 
purposes of transferring the policy to a different insurance provider 
when there is no lapse in coverage will not be considered terminated or 
canceled coverage for the purpose of the preceding sentence.
    (5) The acreage to which prevented planting coverage applies will 
not exceed the total eligible acreage on all FSA Farm Serial Numbers in 
which you have a share, adjusted for any reconstitution that may have 
occurred on or before the sales closing date. Eligible acreage for each 
FSA Farm Serial Number is determined as follows:
    (i) If you participate in any program administered by the United 
States Department of Agriculture that limits the number of acres that 
may be planted for the crop year, the acreage eligible for prevented 
planting coverage will not exceed the total acreage permitted to be 
planted to the insured crop.
    (ii) If you do not participate in any program administered by the 
United States Department of Agriculture that limits the number of acres 
that may be planted, and unless we agree in writing on or before the 
sales closing date, eligible acreage will not exceed the greater of:
    (A) The FSA base acreage for the insured crop, including acres that 
could be flexed from another crop, if applicable;
    (B) The number of acres planted to onions on the FSA Farm Serial 
Number during the previous crop year; or
    (C) One-hundred percent of the simple average of the number of 
acres planted to onions during the crop years that you certified to 
determine your yield.
    (iii) Acreage intended to be planted under an irrigated practice 
will be limited to the number of acres for which you had adequate 
irrigation facilities prior to the insured cause of loss which 
prevented you from planting.
    (iv) A prevented planting production guarantee will not be provided 
for any acreage:
    (A) That does not constitute at least 20 acres or 20 percent of the 
acreage in the unit, whichever is less (Acreage that is less than 20 
acres or 20 percent of the acreage in the unit will be presumed to have 
been intended to be planted to the insured crop planted in the unit, 
unless you can show that you had the inputs available before the final 
planting date to plant and produce another insured crop on the 
acreage);
    (B) For which the actuarial table does not designate a premium rate 
unless a written agreement designates such premium rate;
    (C) Used for conservation purposes or intended to be left unplanted 
under any program administered by the United States Department of 
Agriculture;
    (D) On which another crop is prevented from being planted, if you 
have already received a prevented planting indemnity, guarantee or 
amount of insurance for the same acreage in the same crop year, unless 
you provide adequate records of acreage and production showing that the 
acreage has a history of double-cropping in each of the last 4 years in 
which the insured crop was grown on the acreage;
    (E) On which the insured crop is prevented from being planted, if 
any other crop is planted and fails, or is planted and harvested, hayed 
or grazed on the same acreage in the same crop year, (other than a 
cover crop as specified in section 14 (d)(2)(iii)(A), or a substitute 
crop allowed in section 14 (d)(2)(iii)(B)), unless you provide adequate 
records of acreage and production showing that the acreage has a 
history of double-cropping in each of the last 4 years in which the 
insured crop was grown on the acreage;
    (F) When coverage is provided under the Catastrophic Risk 
Protection Endorsement if you plant another crop for harvest on any 
acreage you were prevented from planting in the same crop year, even 
if you have a history of double-cropping. If you have a Catastrophic 
Risk Protection Endorsement and receive a prevented planting 
indemnity, guarantee, or amount of insurance for a crop and are 
prevented from planting another crop on the same acreage, you may 
only receive the prevented planting indemnity, guarantee, or amount 
of insurance for the crop on which the prevented planting indemnity, 
guarantee, or amount of insurance is received; or
    (G) For which planting history or conservation plans indicate 
that the acreage would have remained fallow for crop rotation 
purposes.
    (v) For the purpose of determining eligible acreage for 
prevented planting coverage, acreage for all units will be combined 
and be reduced by the number of onion acres timely planted and late 
planted. For example, assume you have 100 acres eligible for 
prevented planting coverage in which you have a 100 percent share. 
The acreage is located in a single FSA Farm Serial Number which you 
insure as two separate optional units consisting of 50 acres each. 
If you planted 60 acres of onions on one optional unit and 40 acres 
of onions on the second

[[Page 6746]]

optional unit, your prevented planting eligible acreage would be 
reduced to zero (i.e., 100 acres eligible for prevented planting 
coverage minus 100 acres planted equals zero).
    (6) In accordance with the provisions of section 6 (Report of 
Acreage) of the Basic Provisions (Sec. 457.8), you must report by 
unit any insurable acreage that you were prevented from planting. 
This report must be submitted on or before the acreage reporting 
date. For the purpose of determining acreage eligible for a 
prevented planting production guarantee, the total amount of 
prevented planting and planted acres cannot exceed the maximum 
number of acres eligible for prevented planting coverage. Any 
acreage you report in excess of the number of acres eligible for 
prevented planting coverage, or that exceeds the number of eligible 
acres physically located in a unit, will be deleted from your 
acreage report.

15. Written Agreements

    Designated terms of this policy may be altered by written 
agreement in accordance with the following:
    (a) You must apply in writing for each written agreement no 
later than the sales closing date, except as provided in section 
15(e);
    (b) The application for written agreement must contain all terms 
of the contract between the insurance provider and the insured that 
will be in effect if the written agreement is not approved;
    (c) If approved by us, the written agreement will include all 
variable terms of the contract, including, but not limited to, crop 
type or variety, the guarantee, premium rate, and price election;
    (d) Each written agreement will only be valid for one year. (If 
the written agreement is not specifically renewed the following 
year, insurance coverage for subsequent crop years will be in 
accordance with the printed policy); and
    (e) An application for written agreement submitted after the 
sales closing date may be approved if, after a physical inspection 
of the acreage, it is determined that no loss has occurred and the 
crop is insurable in accordance with the policy and written 
agreement provisions.

    Signed in Washington, DC, on February 6, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-3328 Filed 2-12-97; 8:45 am]
BILLING CODE 3410-FA-P