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

65741

Vol. 62, No. 241

Tuesday, December 16, 1997

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

Pea Crop Insurance Regulations; and

Common Crop Insurance Regulations,

Dry Pea 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 dry

peas. 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, separate dry

peas and green peas into separate crop

insurance provisions, include the

current pea crop insurance regulations

with the Common Crop Insurance

Policy for ease of use and consistency of

terms, and to restrict the effect of the

current pea crop insurance regulations

to the 1997 and prior crop years.

EFFECTIVE DATE: December 16, 1997.

FOR FURTHER INFORMATION CONTACT:

Arden Routh, Insurance Management

Specialist, Research and Development,

Product Development Division, Federal

Crop Insurance Corporation, United

States Department of Agriculture, 9435

Holmes Road, Kansas City, MO 64131,

telephone (816) 926–7730.

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

The Office of Management and Budget

(OMB) has determined this rule to be

exempt for the purposes of Executive

Order No. 12866, and, therefore, has not

been reviewed by OMB.

Paperwork Reduction Act of 1995

Pursuant to the Paperwork Reduction

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

collections of information have been

approved by the Office of Management

and Budget (OMB) under control

number 0563–0053.

Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. This rule contains no Federal

mandates (under the regulatory

provisions of title II of the UMRA) for

State, local, and tribal governments or

the private sector. Therefore, this rule is

not subject to the requirements of

sections 202 and 205 of the UMRA.

Executive Order No. 12612

It has been determined under section

6(a) of Executive Order No. 12612,

Federalism, that this rule does not have

sufficient federalism implications to

warrant the preparation of a Federalism

Assessment. The provisions contained

in this rule will not have a substantial

direct effect on States or their political

subdivisions, or on the distribution of

power and responsibilities among

various levels of government.

Regulatory Flexibility Act

This regulation will not have a

significant economic impact on a

substantial number of small entities.

New provisions included in this rule

will not impact small entities to a

greater extent than on 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 previous years production

if adequate records are available to

support the certification. The producer

must maintain the production records to

support the certified information for at

least three 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. 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. 12998

This final rule has been reviewed in

accordance with Executive Order No.

12998 on civil justice reform. The

provisions of this rule will not have a

retroactive effect prior to the effective

date. The provisions of this rule will

preempt State and local laws to the

extent such State and local laws are

inconsistent herewith. The

administrative appeal provisions

published at 7 CFR part 11 must be

exhausted before any action for judicial

review may be brought.

Environmental Evaluation

This action is not expected to have a

significant impact on the quality of the

human environment, health, and safety.

Therefore, neither an Environmental

Assessment nor an Environmental

Impact Statement is needed.

National Performance Review

This regulatory action is being taken

as part of the National Performance

Review Initiative to eliminate

unnecessary or duplicative regulations

and improve those that remain in force.

Background

On Thursday, May 15, 1997, FCIC

published a proposed rule in the

Federal Register at 62 FR 26750 to add

to the Common Crop Insurance

Regulations (7 CFR part 457) a new

section, 7 CFR 457.140, Dry Pea Crop

Insurance Provisions. The new

provisions will be effective for the 1998

and succeeding crop years. These

provisions will replace and supersede
65742 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations

the current provisions for insuring dry

peas found at 7 CFR part 416 (Pea Crop

Insurance Regulations).

Following publication of the proposed

rule, the public was afforded 30 days to

submit written comments, data, and

opinions. A total of 42 comments were

received from an insurance service

organization and reinsured companies.

The comments received, and FCIC’s

responses, are as follows:

Comment: An insurance service

organization recommended that FCIC

consider combining contract seed peas

and contract seed beans into one crop

provision.

Response: FCIC will consider

combining insurance provisions for

these two crop types in the future.

Comment: An insurance service

organization was concerned about late

and prevented planting coverage for dry

peas if revisions to the Basic Provisions

are not finalized in time to be effective

for the 1998 crop year.

Response: The late and prevented

planting provisions in the Basic

Provisions, will be applicable to this

policy.

Comment: An insurance service

organization questioned if the plant

population is determined per unit or per

acre within the unit in the definition of

‘‘adequate stand.’’

Response: FCIC has clarified the

definition of ‘‘adequate stand’’ to

specify that the plant population is

determined on a per acre basis.

Comment: An insurance service

organization questioned if the term

‘‘contract seed peas’’ had replaced

‘‘wrinkled varieties of dry peas’’ in the

1986–CHIAA 713 policy.

Response: The term ‘‘contract seed

peas’’ has replaced ‘‘wrinkled varieties

of dry peas’’ in those crop provisions.

Comment: An insurance service

organization questioned if item (1) in

the definition of ‘‘dry peas’’ includes

peas grown for seed that do not qualify

as contract seed for the purpose of the

policy, and if this allows such peas to

be included in the same unit as the dry

edible types.

Response: Peas grown for seed that do

not qualify as contract seed peas under

the policy terms are treated the same as

dry edible peas for purposes of the

policy. Therefore, the peas grown for

seed could be included in the same unit.

Comment: A reinsured company and

an insurance service organization

indicated that cultural practices may

exist that are not recognized (or possibly

known) by the Cooperative State

Research, Education and Extension

Service (CSREES). The comments

indicated that the definition of ‘‘Good

farming practices’’ is too restrictive

since it limits acceptable farming

practices to those recognized by the

CSREES. The comments also suggested

changing the last word of the definition

from ‘‘county’’ to ‘‘area.’’

Response: CSREES recognizes farming

practices that are considered acceptable

for producing dry peas. If a producer is

following practices currently not

recognized as acceptable by CSREES,

such recognition can be sought by

interested parties. The actuarial

documents are on a county basis. No

changes have been made.

Comment: A reinsured company

recommended adding the words ‘‘and

quality’’ after the word ‘‘quantity’’ in the

definition of ‘‘Irrigated practice.’’

Response: 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 questioned the definition

of ‘‘local market price’’ which refers to

grades and prices for ‘‘dry peas or

lentils.’’ The definition of ‘‘dry peas’’

includes lentils as one dry pea type. It

seems unnecessary to specify ‘‘or

lentils’’ if the language in the definition

of ‘‘local market price’’ is intended to

exclude contract seed peas. The

commenter recommended changing the

words ‘‘dry peas or lentils’’ to ‘‘dry

edible peas or lentils,’’ but if there is no

change, ‘‘lentils’’ should be defined

separately from the ‘‘dry peas.’’

Response: Under the definition of

‘‘dry peas,’’ peas grown for seed may be

insured as dry edible peas. FCIC has

amended the definition of local market

price by deleting the words ‘‘and

lentils.’’

Comment: A reinsured company

questioned whether the reference to

‘‘late planting period’’ in the definition

of ‘‘practical to replant’’ is still

appropriate since there is not a section

in these provisions for late and

prevented planting. The commenter also

asked if late planting period will be

defined in the late and prevented

planting provisions of the proposed

Basic Provisions.

Response: Since the late planting

period is no longer defined in these

Crop Provisions, the words ‘‘late

planting period’’ have been changed to

‘‘25 days.’’ The Basic Provisions contain

a definition for ‘‘late planting period’’ as

well as sections with provisions for late

and prevented planting.

Comment: An insurance service

organization stated that a nurse crop is

not always intended to be harvested

separately, but may be removed with a

herbicide or other means. The

commenter recommended deleting the

phrase ‘‘that is intended to be harvested

separately,’’ in the definition of ‘‘nurse

crop.’’

Response: The primary reason that a

nurse crop is planted is to improve the

growing conditions of the crop with

which it is grown. The definition has

been revised to specify that the nurse

crop is not intended to be harvested

with the insured crop.

Comment: An insurance service

organization questioned if the phrase

‘‘marketing window’’ in the definition

of ‘‘practical to replant’’ applies to dry

peas.

Response: The Federal Agriculture

Improvement and Reform Act of 1996

requires FCIC to consider marketing

window when determining whether it is

practical to replant. No change has been

made.

Comment: A reinsured company and

an insurance service organization are

concerned with the definition of

‘‘replanting.’’ The reinsured company

indicated that the phrase replace the pea

seed and then replacing the pea seed is

awkward and cumbersome. The

insurance service organization

recommended clarifying the definition

of ‘‘replanting’’ by specifying the crop

name as follows: ‘‘with the expectation

of growing a successful pea crop.’’

Response: The definition of

‘‘replanting’’ clearly describes the steps

required to replant the crop. The

producer must first perform the cultural

practices needed to replant the seed

before replanting the seed. FCIC has

revised the definition to specify that the

crop be replanted with or expectation of

producing at least the guarantee. No

change has been made.

Comment: An insurance service

organization stated that the definition of

‘‘salvage value’’ appears to be

unnecessary as the term is not used

elsewhere in these provisions.

Response: FCIC has deleted the

phrase ‘‘salvage value’’ from these Crop

Provisions.

Comment: An insurance service

organization questioned whether the

defined dry pea types are the same as

the varietal groups of dry peas that

qualify for basic units in the current

1986–CHIAA 713 provisions.

Response: The dry pea types defined

in these Crop Provisions are the same as

the varietal groups of dry peas that

qualify for basic units in the current

1986–CHIAA 713 provisions, except

that Austrian Winter Peas are added

under these Crop Provisions. A basic

unit may be divided into optional units

by type.
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations 65743

Comment: An insurance service

organization stated that section 2 allows

basic units to be divided into optional

units by type (varietal group). The

proposed change would require an

insured to keep separate production

records to qualify for optional units by

type and the insured would no longer

qualify for the basic unit discount. The

commenter asked whether there would

be any corresponding rate adjustment?

Response: Insureds have the option of

selecting optional units by type. It is not

required. To qualify for optional units,

the insured must maintain separate

production records by type. The

premium rate charged will depend on

the unit structure selected by the

insured.

Comment: An insurance service

organization recommended removal of

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

of the proposed rule that states ‘‘In

addition to, or instead of, establishing

optional units by section, section

equivalent or FSA Farm Serial Number

since section 2(e)(4) of the proposed

rule specifies that ‘‘Each optional unit

must meet one or more of the following

criteria.

Response: FCIC has revised this

provision in the Basic Provisions.

Comment: An insurance service

organization questioned if the various

types of peas listed in the ‘‘dry pea’’

definition have similar growing seasons

and harvest dates.

Response: With the exception of

Austrian Winter Peas, the various types

of peas listed in the ‘‘dry pea’’ definition

have similar growing seasons and

harvest dates. Austrian Winter Peas

have a different growing season since

they are normally planted in the fall.

This difference should be no more

complex than is the case for winter and

spring wheats that also are grown in the

Pacific Northwest.

Comment: A reinsured company and

an insurance service organization

questioned why the provisions in

section 3 allow different price election

percentages by dry pea type. This is not

consistent with most other Crop

Provisions unless each type is treated as

a separate crop. They stated that this

inconsistency may lead to confusion on

the part of the insureds and agents.

Response: Producer groups have

requested the flexibility to select a

different percentage of the maximum

price election for each type. The

economic significance of different types

of dry peas can vary considerably to a

producer. Insurance providers have

already programmed computer systems

to allow variation in price election

percentages for dry beans. There should

be no significant costs if the same

system is used for dry peas. No changes

have been made.

Comment: An insurance service

organization questioned why peas

would be excluded from the seed

contract ‘‘during’’ the crop year.

Response: The processor may modify

the terms of the contract to exclude

acreage or production because of overproduction. If, for any reason, peas are

excluded, they may not be covered

under these Crop Provisions.

Comment: An insurance service

organization questioned whether, under

section 7(a)(3), interplanting would be

limited to certain acres and whether this

practice would require a growing season

inspection.

Response: If the Special Provisions

allow for interplanted dry peas,

insurance coverage for this practice

would apply to all acreage in a county.

If a written agreement provides coverage

for interplanted dry peas, the agreement

itself would specify any limitations. In

neither case, would a growing season

inspection be required.

Comment: An insurance service

organization stated that the term ‘‘lease’’

in section 7(b) is confusing. It

questioned if this section should be

moved to the definition of ‘‘seed

company.’’

Response: FCIC agrees that the

provisions are confusing and has

revised section 7(b) to specify that the

insured must retain control of the leased

acreage.

Comment: An insurance service

organization questioned the provisions

in section 7(c) that reference an

adequate stand as one capable of

producing ‘‘at least the production

guarantee’’ which conflicts with the

definition of ‘‘adequate stand.’’

Response: Section 7(c) has been

revised to refer to adequate stand.

Comment: An insurance service

organization questioned the provisions

of section 7(c), which permit insurance

for Austrian Winter Peas, if provided for

on the Special Provisions, the insured

requests insurance on or before the sales

closing date, and if the insurance

provider agrees in writing that there is

an adequate stand in the spring to

produce the yield used to establish the

production guarantee. The commenter

asked if a growing season inspection

would be required.

Response: A preliminary inspection

will be required to determine if there is

an adequate stand for insurance

coverage. Once it is determined that

there is an adequate stand, and

insurance has attached, it will be up to

the insurance provider to determine if a

growing season inspection should be

performed.

Comment: An insurance service

organization recommended clarifying

the provisions of section 7(d) to specify

that coverage for replanted acreage will

be based on the originally planted type,

and to move this provision to section

8(b).

Response: To be consistent with other

Crop Provisions, FCIC has added a

provision to specify that the guarantee

and premium for acreage replanted to a

different insurable type will be based on

the replanted type. Since this provision

describes the insured crop, it will

remain in section 7.

Comment: A reinsured company and

an insurance service organization

recommended deleting the phrase in

section 8(b) to the extent that the

majority of producers in the area would

normally not further care for the crop as

this phrase is subjective and

meaningless, and causes problems if

acreage of the crop is damaged after the

final planting date, but other producers

in the area are still replanting.

Response: FCIC has revised this

provision to require replanting when

most producers of the crop on acreage

with similar characteristics are

replanting.

Comment: A reinsured company

questioned whether the phrase at the

beginning of section 9 should be ‘‘In

addition to’’ instead of ‘‘In accordance

with.’’

Response: FCIC has amended the

beginning of section 9 accordingly.

Comment: A reinsured company and

an insurance service organization

questioned if the provisions of section

9(b) applied only to Austrian Winter

Peas or to all dry pea types.

Response: Section 9(b) has been

clarified to indicate that the provisions

apply to all dry pea types unless

otherwise specified in the Special

Provisions.

Comment: An insurance service

organization indicated that the

calculation sequence in section

12(b)(1)–(13) is difficult to follow

because it is so wordy. They stated that

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. FCIC will add

an example for clarity.

Comment: An insurance service

organization questioned if the reference

to ‘‘each contract seed pea type,’’ in

section 12(b)(4), meant the same as each

type that qualifies for a separate

optional unit according to section
65744 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations

2(e)(4)(i), or if the optional unit division

is applicable to only the ‘‘types’’ listed

in the definition or ‘‘dry peas.’’ If this

is the case, the commenter

recommended that another term should

be used in this section as well as section

12(c).

Response: The provisions in sections

12(b)(4) and 12(c) should have referred

to contract seed pea varieties. This

section has been clarified accordingly.

Comment: A reinsured company

questioned if the terms ‘‘value’’ and

‘‘actual value’’ in section 12(c) should

be defined. The commenter also wanted

to know how cull value is incorporated

into the calculations to determine the

value of production to count.

Response: FCIC has revised section

12(c) to refer to the ‘‘highest local

market price’’ instead of ‘‘actual value’’

in order to set an objective standard for

determining the value of damaged

production. The provisions clearly

indicate that the value of production to

count is based on the new term local

market price. The local market price of

any ‘‘cull’’ production will be included

when determining the amount of any

indemnity.

Comment: An insurance service

organization questioned how the ‘‘actual

value’’ is determined for mature

production that does not meet the

minimum quality requirements

contained in the seed pea contract. The

commenter asked if the value of

production that does not meet the

minimum quality requirements

contained in the seed pea contract

would be considered to be the ‘‘salvage

value.’’

Response: The ‘‘local market price’’

for contract seed pea production not

meeting the minimum quality

requirements contained in the seed pea

contract will be the highest price

obtainable for the production regardless

of its ultimate disposition. If a salvage

use proves to provide the highest value

obtainable, then that ‘‘salvage value’’

will be used to determine the value of

the production to count.

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: A later appraisal will only

be necessary if the insurance provider

and the insured do not agree on the

appraisal or if the insurance provider

believes that the crop needs to be

carried farther to make a more accurate

appraisal. If the insured does not

provide sufficient care for the remaining

crop, the insurance provider may use

the original appraisal or assess an

appraisal for an uninsured cause of loss.

Therefore, no change has been made.

Comment: A reinsured company

questioned if the term ‘‘condition’’

should be defined as this term is used

in section 12(e)(3)(i)(C).

Response: FCIC has defined

‘‘conditioning’’ in section 1 of these

Crop Provisions.

Comment: The crop insurance

industry recommended that the

requirement for a written agreement to

be renewed each year be removed.

Terms of the agreement should be stated

in the agreement to fit the particular

situation for the policy, or if no

substantive changes occur from one year

to the next, allow the written agreement

to be continuous.

Response: Written agreements are

intended to change policy terms or

permit insurance in unusual situations

where such changes will not increase

risk. If such practices continue year to

year, they should be incorporated into

the policy or Special Provisions. It is

important to minimize exceptions to

assure that the insured is well aware of

the specific terms of the policy. The

written agreement provisions are

deleted and moved to the Basic

Provisions.

In addition to the changes described

above, FCIC has made the following

editorial changes to the Dry Pea Crop

Insurance Provisions:

1. Amended the paragraph preceding

section 1 (Definitions) to include the

Catastrophic Risk Protection

Endorsement.

2. Section 1—Amended the definition

of ‘‘combining,’’ ‘‘contract seed peas,’’

‘‘local market price,’’ ‘‘practical to

replant,’’ and ‘‘seed company contract’’

for clarification. Deleted the definition

of ‘‘contract price’’ since this term is not

used in these provisions. Deleted the

definition of ‘‘days,’’ ‘‘FSA,’’ ‘‘final

planting date,’’ ‘‘good farming

practices,’’ ‘‘interplanted,’’ ‘‘irrigated

practice,’’ ‘‘production guarantee (per

acre),’’ ‘‘replanting,’’ ‘‘USDA,’’ ‘‘timely

planting,’’ and ‘‘written agreement’’

because these definitions were moved to

the Basic Provisions. Revised the

definition of ‘‘planted acreage’’ and

‘‘practical to replant’’ to delete those

provisions moved to the Basic

Provisions.

3. Section 2—Deleted those

provisions moved to the Basic

Provisions.

4. Section 3—Removed the provision

in section 3 regarding administrative

fees because it is duplicative of

provisions contained in 7 CFR part 400,

subpart T.

5. Section 6—Deleted the

requirements of ‘‘spring-planted’’ and

‘‘grown under contract with a seed

company’’ since they are included in

the definition of ‘‘contract seed peas.’’

6. Section 7(c)—Clarified that

Austrian Winter Peas will be insured if

authorized by the Special Provisions, if

the insured requests insurance in

writing for such dry peas, and if the

insurance provider agrees in writing to

provide coverage.

7. Section 12(d)(1)(iv)(B)—Clarified

language to indicate that if the producer

continues to care for the crop, the

amount of production to count will be

the harvested production or the

reappraised amount if the crop is not

harvested.

In general, FCIC has clarified some

language to make these provisions easier

to read.

Good cause is shown to make this rule

effective upon publication in the

Federal Register. This rule improves the

dry pea insurance coverage and brings

it under the Common Crop Insurance

Policy Basic Provisions for consistency

among policies. The earliest contract

change date that can be met for the 1998

crop year is December 31, 1997. It is

therefore imperative that these

provisions be made final before that

date so that the reinsured companies

and insureds may have sufficient time

to implement these changes. Therefore,

public interest requires the agency to act

immediately to make these provisions

available for the 1998 crop year.

List of Subjects in 7 CFR Part 457

Crop insurance, Dry pea, Pea crop

insurance regulations.

Final Rule

Accordingly, for the reasons set forth

in the preamble, the Federal Crop

Insurance Corporation, hereby 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 457.140 is added to read as

follows:

§ 457.140 Dry pea crop insurance

provisions.

The Dry Pea Crop Insurance

Provisions for the 1998 and succeeding

crop years are as follows:

FCIC policies:

DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Reinsured policies:
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations 65745

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Dry Pea 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.

Adequate stand. A population of live

plants per acre that will produce at least the

yield used to establish your production

guarantee.

Base price. The price per pound stipulated

in the processor contract without regard to

discounts or incentives that may apply, and

that will be paid to the producer for at least

50 percent of the total production under

contract with the seed company.

Combining. A mechanical process that

separates the peas from the pods and other

vegetative matter and place the peas into a

temporary storage receptacle.

Conditioning. A process that improves the

quality of production by screening or any

other operation commonly used in the dry

pea industry to remove dry peas that are

deficient in quality.

Contract seed peas. Dry peas produced for

seed to be planted at a future date and that:

(a) Are grown on acreage enrolled in the

seed certification program administered by

the state in which the peas are produced;

(b) Are grown on acreage planted in the

spring; and

(c) Are under a seed company contract.

Dry peas. Peas of the following types:

(a) All spring-planted smooth green and

yellow varieties of commercial dry edible

peas, and peas grown to produce seed to be

planted at a future date that do not meet the

requirements contained in the seed company

contract;

(b) All fall-planted varieties of Austrian

Winter Peas only if provided for in the

Special Provisions;

(c) All spring-planted varieties of lentils;

and

(d) All varieties of contract seed peas.

Harvest. Combining of dry peas.

Local market price. The cash price per

pound for the U.S. No. 2 grade of dry peas

as determined by us. Such price will be the

prevailing dollar amount these buyers are

willing to pay for dry peas containing the

maximum limits of quality deficiencies

allowable for the U.S. No. 2 grade. Factors

not associated with grading under the United

States Standards for Whole Dry Peas, Split

Peas and Lentils will not be considered.

Nurse crop (companion crop). A crop

planted into the same acreage as another

crop, that is intended to improve the growing

conditions for the crop with which it is

grown and that is not intended to be

harvested with the insured crop.

Planted acreage. In addition to the

definition contained in the Basic Provisions,

dry peas must initially be planted in rows to

be considered planted. Acreage planted in

any other manner will not be insurable

unless otherwise provided by the Special

Provisions or by written agreement.

Practical to replant. In addition to the

definition contained in the Basic Provisions,

it will not be considered practical to replant

dry peas, except for seed peas, more than 25

days after the final planting date unless

replanting is generally occurring in the area.

For seed peas, it will not be considered

practical to replant unless production from

the replanted acreage can be delivered under

the terms of the seed pea processor contract

or the seed company agrees in writing to

accept such production.

Price election. In addition to the provisions

of the definition contained in the Basic

Provisions, the price election for contract

seed peas will be a percentage (not to exceed

100 percent) of the base price that you elect.

Seed company. Any business enterprise

regularly engaged in the processing of

contract seed peas, that possesses all licenses

and permits for marketing contract seed peas

required by the state in which it operates,

and that owns, or has contracted, sufficient

drying, screening, and bagging or packaging

equipment to accept and process the contract

seed peas within a reasonable amount of time

after harvest.

Seed company contract. A written

agreement between the producer and the

seed company, executed by the acreage

reporting date, containing at a minimum:

(a) The producer’s promise to plant and

grow one or more specific varieties of

contract seed peas, and deliver the

production from those varieties to the seed

company;

(b) The seed company’s promise to

purchase all the production stated in the

contract; and

(c) A fixed price, or a method to determine

such price based on published information

compiled by a third party, that will be paid

to the producer for at least 50 percent of the

production stated in the contract.

2. Unit Division.

(a) In addition to, or instead of,

establishing optional units by section, section

equivalent, or FSA farm serial number and by

irrigated and non-irrigated acreage as

provided in the unit division provisions

contained in the Basic Provisions, a separate

optional unit may be established for each pea

type listed in section 1 of these Crop

Provisions.

(b) Contract seed peas may qualify for

optional units only if the seed company

contract specifies the number of acres under

contract. Contract seed peas produced under

a seed company contract that specifies only

an amount of production or a combination of

acreage and production, are not eligible for

optional units.

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 dry peas,

including contract seed peas, 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 dry pea type so

designated in the Special Provisions. The

price elections you choose for each type are

not required to 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 may choose 80 percent of

the maximum price election for another type.

However, if you elect the Catastrophic Risk

Protection level of insurance for any dry pea

type, the same level of coverage will be

applicable to all insured acreage in the

county.

4. Contract Changes.

In accordance with section 4 of the Basic

Provisions, the contract change date is

November 30 preceding the cancellation

date.

5. Cancellation and Termination Dates.

In accordance with section 2 of the Basic

Provisions, the cancellation and termination

dates are March 15.

6. Report of Acreage.

In addition to the provisions of section 6

of the Basic Provisions, you must submit a

copy of the seed company contract to us on

or before the acreage reporting date if you are

insuring contract seed peas.

7. Insured Crop.

(a) In accordance with section 8 of the

Basic Provisions, the crop insured will be all

the dry pea types in the county (including

Austrian Winter Peas if you request

insurance for such peas in accordance with

section 7(c)) for which a premium rate is

provided by the actuarial documents:

(1) In which you have a share;

(2) That are planted for harvest as dry peas

and which, if grown under a seed company

contract, are not excluded from such contract

during the crop year;

(3) That are grown in accordance with the

requirements of the seed company contract,

if applicable;

(4) That are not (unless allowed by the

Special Provisions or by written agreement):

(i) Interplanted with another crop;

(ii) Planted into an established grass or

legume; or

(iii) Planted as a nurse crop.

(b) You will be considered to have a share

in the insured crop if, under the processor

contract, you retain control of the acreage on

which the contract seed peas are grown, you

are at risk of loss, and the processor contract

is in effect.

(c) Austrian Winter Peas are only insurable

if you request insurance in writing for such

dry peas, and we agree in writing to provide

coverage. Your request to insure Austrian

Winter Peas must be submitted to us not later

than the sales closing date. We will not agree

to insure Austrian Winter Peas unless an

adequate stand exists in the spring.

(d) Any acreage of dry peas that is

destroyed and replanted to a different

insurable type of dry peas will be considered

insured acreage. The guarantee and premium

for acreage replanted to a different insurable

type will be based on the replanted type and

will be calculated in accordance with

sections 3 and 7 of the Basic Provisions and

section 3 of these Crop Provisions.

8. Insurable Acreage.

In addition to the provisions of section 9

of the Basic Provisions:

(a) We will not insure any acreage that

does not meet the rotation requirements, if

applicable, contained in the Special

Provisions; or
65746 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations

(b) Any acreage of the insured crop

damaged before the final planting date, to the

extent that most producers of the crop or

acreage with similar characteristics in the

area would normally not further care for the

crop, must be replanted unless we agree that

it is not practical to replant. We will not

require you to replant if it is not practical to

replant the type of dry peas originally

planted.

9. Insurance Period.

In addition to the provisions of section 11

of the Basic Provisions:

(a) Coverage for Austrian Winter Peas, will

begin on the earlier of March 16 or the date

we agree to accept the acreage for insurance,

but not before March 1; and

(b) The calendar date for the end of the

insurance period for all insurable types of

dry peas in the county is September 30 of the

crop year in which the crop normally is

harvested unless otherwise specified in the

Special Provisions.

10. 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 that 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 due to a cause of loss contained in section

10(a) through (g) that occurs during the

insurance period.

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 must be at least 10 feet wide and extend

the entire length of each field in the unit. If

you intend to destroy the crop prior to

harvest, the samples must not be destroyed

until after 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 such production

records were not provided; or

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

commingled production to such units in

proportion to our liability on the harvested

acreage for the units.

(b) In the event of loss or damage to your

pea crop covered by this policy, we will

settle your claim by:

(1) Multiplying the insured acreage of each

dry pea type, if applicable, excluding

contract seed peas, by its respective

production guarantee;

(2) Multiplying each result of section

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

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

(4) Multiplying the insured acreage of each

contract seed pea variety by its respective

production guarantee;

(5) Multiplying each result of section

12(b)(4) by the applicable base price;

(6) Multiplying each result of section

12(b)(5) by your selected price election

percentage;

(7) Totaling the results of section 12(b)(6);

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

and section 12(b)(7);

(9) Multiplying the total production to be

counted of each dry pea type, excluding

contract seed peas, if applicable (see section

12(d)), by the respective price elections;

(10) Totaling the value of all contract seed

pea production (see section 12(c));

(11) Totaling the results of section 12(b)(9)

and section 12(b)(10);

(12) Subtracting the result of section

12(b)(11) from the result in section 12(b)(8);

and

(13) Multiplying the result of section

12(b)12 by your share.

For example:

You have a 100 percent share in 100 acres

of spring-planted smooth green dry edible

peas in the unit, with a guarantee of 4,000

pounds per acre and a price election of $0.09

per pound. You are only able to harvest

200,000 pounds. Your indemnity would be

calculated as follows:

(1) 100 acres × 4,000 pounds = 400,000

pounds guarantee;

(2) 400,000 pounds × $0.09 price election

= $36,000.00 value of guarantee;

(9) 200,000 pounds × $0.09 price election

= $18,000.00 value of production to count;

$36,000.00 value of guarantee ¥$18,000.00

value of production to count = $18,000.00

loss; and

(13) $18,000.00 × 100 percent = $18,000.00

indemnity payment.

You also have a 100 percent share in 100

acres of contract seed peas in the same unit,

with a guarantee of 5,000 pounds per acre

and a base price of $0.40 per pound. Your

selected price election percentage is 75

percent. You are only able to harvest 450,000

pounds. Your total indemnity for both

spring-planted smooth green dry edible peas

and contract seed peas would be calculated

as follows:

(1) 100 acres × 4,000 pounds = 400,000

pounds guarantee for the spring-planted

smooth green dry edible pea type, and

(4) 100 acres × 5,000 pounds = 500,000

pounds guarantee for the contract seed pea

type;

(2) 400,000 pounds guarantee × $0.09 price

election = $36,000.00 value of guarantee for

the spring-planted smooth green dry edible

pea type, and

(5) 500,000 pounds guarantee × $0.40 base

price = $200,000.00 gross value of guarantee

for the contract seed pea type;

(6) $200,000 × .75 price election percentage

= $150,000 net value of guarantee for the

contract seed pea type;

(8) $36,000.00+$150,000.00 = $186,000.00

total value of guarantee;

(9) 200,000 pounds × $0.09 price election

= $18,000.00 value of production to count for

the spring-planted smooth green dry edible

pea type, and

(10) 450,000 pounds × $0.30 = $135,000.00

value of production to count for the contract

seed pea type;

(11) $18,000.00+$135,000.00 = $153,000.00

total value of production to count;

(12) $186,000.00¥$153,000.00 =

$33,000.00 loss; and

(13) $33,000.00 loss × 100 percent =

$33,000.00 indemnity payment.

(c) The value of contract seed pea

production to count for each variety in the

unit will be determined as follows:

(1) For production meeting the minimum

quality requirements contained in the seed

company contract, and for production that

does not meet such requirements due to

uninsured causes:

(i) Multiplying the local market price or

base price per pound, whichever is greater,

by the price election percentage you selected;

and

(ii) Multiplying the result by the number of

pounds of such production.

(2) For mature production not meeting the

minimum quality requirements contained in

the seed pea processor contract due to

insurable causes, and immature production

that is appraised:

(i) Multiplying the highest local market

price available for such dry peas by the price

election percentage you selected; and

(ii) Multiplying the result by the number of

pounds of such production.

(d) The total pea production to count (in

pounds) from all insurable acreage on the

unit will include:

(1) All appraised production as follows:

(i) Not less than the production guarantee

per acre for acreage:

(A) That is abandoned;

(B) That is put to another use without our

consent;

(C) That is damaged solely by uninsured

causes; or

(D) For which you fail to provide

production records that are acceptable to us;

(ii) Production lost due to uninsured

causes;

(iii) Unharvested production (mature

unharvested production of dry peas,

excluding Austrian Winter Peas, may be

adjusted for quality deficiencies in

accordance with section 12 (c) or (e), if

applicable); 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 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
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Rules and Regulations 65747

the acreage will be the harvested production,

or our reappraisal if the crop is not harvested;

and

(2) All harvested production from the

insurable acreage.

(e) Mature production of smooth green and

yellow peas, lentils, and seed peas that do

not qualify as contract seed peas under the

policy terms, and that are not deliverable

under the contract or are sold under the

contract for less than the contract price, may

be adjusted for quality deficiencies. No

adjustment for quality deficiencies will be

allowed for Austrian Winter Peas.

(1) Production will be eligible for quality

adjustment if:

(i) Deficiencies in quality, in accordance

with the United States Standards for Whole

Dry Peas, Split Peas, and Lentils, result in

production grading U.S. No. 2 or worse

because of defects, color, skinned production

(lentils only), odor, material weathering, or

distinctly low quality; 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.

(2) Quality will be a factor in determining

your loss 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 dry peas under the

authority of the United States Agricultural

Marketing 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. Test

weight for quality adjustment purposes may

be determined by our loss adjuster.

(3) Dry Pea production that is eligible for

quality adjustment, as specified in sections

12(e) (1) and (2), will be reduced as follows:

(i) The highest local market price for the

qualifying damaged production will be

determined on the earlier of the date such

damaged production is sold or the date of

final inspection for the unit. The highest

local market price for the qualifying damaged

production will be determined in the local

area to the extent feasible. We may obtain

prices from any buyer of our choice. If we

obtain prices from one or more buyers

located outside your local market area, we

will reduce such prices by the additional

costs required to deliver the dry peas to those

buyers. Discounts used to establish the net

value of the damaged production will be

limited to those that are usual, customary,

and reasonable.

The value will not be reduced for:

(A) Moisture content;

(B) Damage due to uninsured causes; or

(C) Drying, handling, processing, or any

other costs associated with normal

harvesting, handling, and marketing of the

dry peas; except, if the value of the damaged

production can be increased by conditioning,

we may reduce the value of the production

after it has been conditioned by the cost of

conditioning but not lower than the value of

the production before conditioning;

(ii) The value per pound of the damaged

or conditioned production will be divided by

the local market price to determine the

quality adjustment factor;

(iii) The number of pounds of the damaged

or conditioned production will then be

multiplied by the quality adjustment factor to

determine the production count to be

included in section 12(d); and

(iv) Any production harvested from plants

growing in the insured crop may be counted

as production of the insured crop on a weight

basis.

13. Prevented Planting.

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 a level

specified in the actuarial documents.

Signed in Washington, D.C., on December

9, 1997.

Kenneth D. Ackerman,

Manager, Federal Crop Insurance

Corporation.

[FR Doc. 97–32619 Filed 12–15–97; 8:45 am]

BILLING CODE 3410–08–P

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection

Service

9 CFR Part 94

[Docket No. 97–034–3]

Change in Disease Status of The

Netherlands Because of BSE

AGENCY: Animal and Plant Health

Inspection Service, USDA.

ACTION: Affirmation of interim rule as

final rule.

SUMMARY: We are adopting as a final

rule, without change, an interim rule

that added The Netherlands to the list

of countries where bovine spongiform

encephalopathy (BSE) exists. We took

this action because BSE was detected in

a cow in The Netherlands. The effect of

the interim rule was to prohibit or

restrict the importation of live

ruminants and certain fresh, chilled,

and frozen meat, and certain other

animal products and animal byproducts

from ruminants which have been in The

Netherlands. The interim rule was

necessary to reduce the risk that BSE

could be introduced into the United

States.

EFFECTIVE DATE: The interim rule was

effective on March 21, 1997.

FOR FURTHER INFORMATION CONTACT: Dr.

John Cougill, Staff Veterinarian, Animal

Products Program, National Center for

Import and Export, VS, APHIS, 4700

River Road Unit 40, Riverdale, MD

20737–1231, (301) 734–3399; or e-mail:

jcougill@aphis.usda.gov.

SUPPLEMENTARY INFORMATION:

Background

In an interim rule effective April 10,

1997, and published in the Federal

Register on April 15, 1997 (62 FR

18263–18264, Docket No. 97–034–1), we

amended our regulations by adding The

Netherlands to the list of countries

where BSE exists. We took this action

because BSE was detected in a cow born

in The Netherlands. We also published

another interim rule in the Federal

Register on May 7, 1997 (62 FR 24802,

Docket No. 97–034–2), that changed the

effective date of the April 1997 interim

rule from April 10, 1997, to March 21,

1997. The change in effective date was

necessary to ensure that the prohibitions

and restrictions established by the April

1997 interim rule applied to animal

products and byproducts that were

shipped to the United States from The

Netherlands between March 21, 1997,

when BSE was detected in The

Netherlands, and April 10, 1997, when

the first interim rule was signed.

Comments on the interim rule were

required to be received on or before June

16, 1997. We received two comments by

that date. They were from a company

that imports cattle semen and an

importer of meat and meat byproducts.

They are discussed below.

The commenters did not oppose

adding The Netherlands to the list of

countries where BSE exists. However,

one comment expressed concerns about

Animal and Plant Health Inspection

Service regulations that restrict the

importation of veal from countries

where BSE is known to exist. The other

comment concerned the trade protocols

of the United States and other countries

for importing cattle semen from

countries where BSE exists. Both

comments are outside the scope of the

interim rule. However, we continually

review and update our regulations to

make them consistent with current

scientific data. We will consider these

comments as we review our regulations.

If we decide to make any changes to our

regulations in response to these

comments, we will publish a proposed

rule in the Federal Register.