[Federal Register Volume 62, Number 2 (Friday, January 3, 1997)]
[Proposed Rules]
[Pages 338-343]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-61]


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DEPARTMENT OF AGRICULTURE
7 CFR Parts 445 and 457


Pepper Crop Insurance Regulations; and Common Crop Insurance 
Regulations, Fresh Market Pepper Crop Insurance Provisions

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 fresh market peppers. 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 Pepper Crop Insurance Regulations under the Common Crop 
Insurance Policy for ease of use and consistency of terms, and to 
restrict the effect of the current Pepper Crop Insurance Regulations to 
the 1997 and prior crop years.

DATES: Written comments, data and opinions on this proposed rule will 
be accepted until close of business February 3, 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 March 3, 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, S.W., 
Washington, D.C., 8:15 a.m. to 4:45 p.m., est, Monday through Friday, 
except holidays.

FOR FURTHER INFORMATION CONTACT: Linda Williams, 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, this rule 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; Fresh Market Pepper 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 fresh market peppers that are eligible for Federal crop 
insurance.
    The information requested is necessary for the reinsured companies 
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 1,755,015 
respondents. The total annual burden on the public for this information 
collection is 2,676,932 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 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

[[Page 339]]

Desk Officer for Agriculture, Office of Information and Regulatory 
Affairs, Office of Management and Budget, Washington, D.C. 20503.
    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. 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 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 parts 11 and 780 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 Sec. 457.148, Fresh Market Pepper 
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 fresh market peppers 
found at 7 CFR part 445 (Pepper Crop Insurance Regulations). FCIC also 
proposes to amend 7 CFR part 445 to limit its effect to the 1997 and 
prior crop years. FCIC will later publish a regulation to remove and 
reserve part 445.
    This rule makes minor editorial and format changes to improve the 
Fresh Market Pepper Crop Insurance Regulations compatibility with the 
Common Crop Insurance Policy. In addition, FCIC is proposing 
substantive changes in the provisions for insuring peppers as follows:
    1. Section 1--Add definitions for the terms ``bell pepper,'' 
``box,'' ``days,'' ``FSA,'' ``good farming practices,'' 
``interplanted,'' ``irrigated practice,'' ``mature bell pepper,'' 
``planted acreage,'' ``practical to replant,'' ``row width,'' and 
``written agreement'' for clarification.
    The definition of ``county'' contained in the Common Crop Insurance 
Policy (Sec. 457.8), will be used to conform with other fresh market 
crop policies. This change will require acreage located in a local 
producing area bordering the county to be insured using the actuarial 
materials for the county where the land is physically located.
    Clarify the definition of crop year to specify that the crop year 
begins on the first day of the earliest planting period for fall-
planted peppers and continues through the end of the insurance period 
for spring-planted peppers.
    Clarify the definition of excess rain to specify that it is an 
amount of precipitation that is sufficient to directly damage the crop. 
Previous regulations defined excessive rain as a minimum of 10 inches 
of rain within a 24-hour period. This change will provide coverage for 
crop damage that occurs when a lesser amount of precipitation is 
received.
    Change the definition of freeze to specify that freeze occurs when 
low air temperatures cause ice to form in the cells of the plant or its 
fruit to encompass conditions found in both frost and freeze.
    Change the definition of harvest to clarify and remove the term 
marketable. Peppers picked from the plant are considered harvested 
whether marketable or not.
    2. Section 3(a)--Clarify that an insured may select only one 
coverage level (and the corresponding amount of insurance designated in 
the Actuarial Table for the applicable planting period and practice) 
for all the fresh market peppers in the county insured under the 
policy.
    3. Section 3(b)--Clarify that the amounts of insurance the insured 
chooses for each planting period and practice must have the same 
percentage relationship to the maximum amount of insurance offered by 
FCIC for each planting period and practice.
    4. Section 3(e)--Add language listing three stages of coverage for 
direct seeded and transplanted acreage. This language was previously 
contained in the actuarial documents.

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    5. Section 9(a)--Add a provision that provides coverage on newly 
cleared land or former pasture land that is planted to fresh market 
peppers. It is a recognized practice to plant the insured crop on 
tilled acreage that has been newly cleared or that has been pasture 
land to eliminate some of the risk of disease and insect damage. This 
change also will standardize current regulations for the fresh market 
vegetable crops.
    6. Section 9(b)(2)--Allow an insured to elect not to replant 
damaged peppers that were initially planted within the fall or winter 
planting periods, provided the final planting date for the planting 
period has passed and damage occurs after 30 days of transplanting or 
after 60 days of direct seeding. With this election, the insured may 
collect an indemnity and that particular acreage will be uninsurable 
for the next planting period. The insured may also elect to replant 
such pepper acreage, collect a replanting payment under section 12, and 
maintain the initial planting period coverage. This change incorporates 
and standardizes procedures utilized in the fresh market vegetable 
crops.
    7. Section 10(f)(1)--Change the calendar date for the end of the 
insurance period from 150 days to 165 days after the date of direct 
seeding or replanting with seed. This change will allow expansion of 
pepper crop insurance coverage into other areas.
    8. Section 14(b)(2)--Modify claim for indemnity calculations by 
providing calculations for catastrophic risk protection coverage and 
for coverage other than catastrophic risk protection. This provision 
includes the use of the catastrophic risk protection price election 
equivalent to determine the total dollar of production to count for 
indemnity purposes. This change is necessary to assure that producers 
that are insured based on a dollar amount of insurance are indemnified 
comparable to producers that are insured based on an actual production 
history (APH) yield basis.
    9. Section 14(c)(2)(iv)--Require the insured to continue to care 
for acreage when the insured does not agree with the appraisal on that 
acreage. Production to count for such acreage will be determined using 
the harvested production if the crop is harvested, or our reappraisal 
if the crop is not harvested.
    10. Section 14(c)(3)--Change the value to count for harvested 
production to the dollar amount obtained by subtracting the allowable 
cost from the price received (this resulting price must not be less 
than the minimum value shown in the Special Provisions), and 
multiplying this result by the number of boxes harvested. Current 
regulations allow the value of sold production to be as low as zero. 
Also, clarify that harvested mature bell peppers that are damaged or 
defective due to insurable causes and are not marketable will not be 
counted as production. These changes are made to assure that the 
minimum value specified in the Special Provisions will be the lowest 
value considered for any marketable harvested production unless the 
insured selected the minimum value option.
    11. 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 the 
procedures for and duration of written agreements.
    12. Section 16--A minimum value option is added. The option allows 
the value of each harvested box to be as low as zero. This option is 
selected on the insurance application. This change will provide 
consistency in regulations found in other fresh market vegetable crops.

List of Subjects in 7 CFR Parts 445 and 457

    Crop insurance, Pepper crop insurance regulations, Fresh market 
peppers.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation hereby proposes to amend 7 CFR parts 445 and 457 
as follows:

PART 445--PEPPER CROP INSURANCE REGULATIONS

    1. The authority citation for 7 CFR part 445 is revised to read as 
follows:

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

    2. The subpart heading preceding Sec. 445.1 is revised to read as 
follows:

Subpart--Regulations for the 1987 Through the 1997 Crop Years

    3. Section 445.7 is amended by revising the introductory text of 
paragraph (d) to read as follows:


Sec. 445.7  The application and policy.

* * * * *
    (d) The application for the 1987 and succeeding crop years is found 
at subpart D of part 400-General Administrative Regulations (7 CFR 
400.37, 400.38). The provisions of the Pepper Crop Insurance Policy for 
the 1987 through 1997 crop years are as follows:
* * * * *

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

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

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

    5. 7 CFR part 457 is amended by adding a new Sec. 457.148 to read 
as follows:


Sec. 457.148  Fresh Market Pepper Crop Insurance Provisions.

    The Fresh Market Pepper Crop Insurance Provisions for the 1998 and 
succeeding crop years are as follows:

    FCIC policies:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

    Reinsured policies:

(Appropriate title for insurance provider)

    Both FCIC and reinsured policies:

FRESH MARKET PEPPER 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.
    Acre--43,560 square feet of land when row widths do not exceed 
six feet, or if row widths exceed six feet, the land area on which 
at least 7,260 linear feet of rows are planted.
    Bell pepper--An annual pepper (of the capsicum annuum species, 
grossum group), widely cultivated for its large, crisp, edible 
fruit.
    Box--One and one-ninth (1\1/9\) bushels of the insured crop.
    Crop year--In lieu of the definition of ``crop year'' contained 
in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), 
crop year is a period of time that begins on the first day of the 
earliest planting period for fall-planted peppers and continues 
through the last day of the insurance period for spring-planted 
peppers. The crop year is designated by the calendar year in which 
spring-planted peppers are harvested.
    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 picking all or a portion of the crop.
    Excess rain--An amount of precipitation sufficient to directly 
damage the crop.

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    FSA--The Farm Service Agency, an agency of the United States 
Department of Agriculture or a successor agency.
    Freeze--The formation of ice in the cells of the plant or its 
fruit, caused by low air temperatures.
    Good farming practices--The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity, 
and are those recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    Harvest--The picking of peppers on the unit.
    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 for the insured crop to make normal 
progress toward maturity.
    Mature bell pepper--A pepper that has reached the stage of 
development that will withstand normal handling and shipping.
    Plant stand--The number of live plants per acre prior to the 
occurrence of an insurable cause of loss.
    Planted acreage--Land in which, for each planting period, 
transplants or seed have been placed manually or by a machine 
appropriate for the insured crop and planting method, at the correct 
depth, into soil that has been properly prepared for the planting 
method and production practice. For each planting period, peppers 
must initially be planted in rows. Acreage planted in any other 
manner will not be insurable unless otherwise provided by the 
Special Provisions or by written agreement.
    Planting period--The period of time designated in the Actuarial 
Table in which the peppers must be planted to be considered fall, 
winter or spring-planted peppers.
    Potential production--The number of boxes of mature bell peppers 
that the pepper plants will or would have produced per acre by the 
end of the insurance period, assuming normal growing conditions and 
practices.
    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, marketing windows, and time to crop maturity, that replanting 
to the insured crop will allow the crop to attain maturity prior to 
the calendar date for the end of the insurance period (inability to 
obtain plants or seed will not be considered when determining if it 
is practical to replant).
    Replanting--Performing the cultural practices necessary to 
replace the pepper seed or transplants and then replacing the pepper 
seed or transplants in the insured acreage with the expectation of 
growing a successful crop.
    Row width--The widest distance from the center of one row of 
plants to the center of an adjacent row of plants.
    Tropical depression--A system identified by the U.S. Weather 
Service as a tropical depression, and for the period of time so 
designated, including tropical storms, gales, and hurricanes.
    Written agreement--A written document that alters designated 
terms of a policy in accordance with section 15.
    2. Unit Division.
    (a) A unit as defined in section 1 (Definitions) of the Basic 
Provisions (Sec. 457.8), (basic unit) will be divided by planting 
period.
    (b) Unless limited by the Special Provisions, these basic units 
may be further divided into optional units if, for each optional 
unit you meet all the conditions of this section or if a written 
agreement for such further division exists.
    (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 premium 
paid for the purpose of electing optional units will be refunded to 
you for the units combined.
    (d) All optional units established for a 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 in which the insured crop was planted;
    (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 
loss adjustment is completed by us; and
    (4) Each optional unit must be located in a separate legally 
identified section. In the absence of sections, we may consider 
parcels of land legally identified by other methods of measure 
including, but not limited to Spanish grants, railroad surveys, 
leagues, labors, or Virginia Military Lands, as the equivalent of 
sections for unit purposes. In areas that have not been surveyed 
using the systems identified above, or another system approved by 
us, or in areas where such systems exist but boundaries are not 
readily discernable, each optional unit must be located in a 
separate farm identified by a single FSA Farm Serial Number.
    3. Amounts of Insurance and Production Stages.
    (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 
coverage level (and the corresponding amount of insurance designated 
in the Actuarial Table for the applicable planting period and 
practice) for all the peppers in the county insured under this 
policy.
    (b) The amount of insurance you choose for each planting period 
and practice must have the same percentage relationship to the 
maximum price offered by us for each planting period and practice. 
For example, if you choose 100 percent of the maximum amount of 
insurance for a specific planting period and practice, you must also 
choose 100 percent of the maximum amount of insurance for all other 
planting periods and practices.
    (c) The amount of insurance available under the catastrophic 
risk protection plan of insurance will be specified in the Actuarial 
Table.
    (d) The production reporting requirements contained in section 3 
(Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities) of the Basic Provisions (Sec. 457.8) do not apply to 
fresh market peppers.
    (e) The amounts of insurance per acre are progressive by stages 
as follows:

------------------------------------------------------------------------
         Percent                                                        
        of amount                                                       
            of                                                          
 Stage  insurance   Length of time if direct       Length of time if    
         per acre            seeded                   transplanted      
         that you                                                       
         selected                                                       
------------------------------------------------------------------------
1.....         65  From planting through the   From planting through the
                    74th day after planting.    44th day after planting.
2.....         85  From the 75th day after     From the 45th day after  
                    planting until the          planting until the      
                    beginning of stage 3.       beginning of stage 3.   
3.....        100  Begins the earlier of 110   Begins the earlier of 80 
                    days after planting, or     days after planting, or 
                    the beginning of harvest.   the beginning of        
                                                harvest.                
------------------------------------------------------------------------


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    (f) Any acreage of peppers damaged in the first or second stage 
to the extent that the majority of producers in the area would not 
normally further care for it, will be deemed to have been destroyed. 
The indemnity payable for such acreage will be based on the stage 
the plants had achieved when 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 April 30 
preceding the cancellation date.
    5. Cancellation and Termination Dates.
    In accordance with section 2 (Life of Policy, Cancellation, and 
Termination) of the Basic Provisions (Sec. 457.8), the cancellation 
and termination dates are July 31.
    6. Report of Acreage.
    In addition to the requirements of section 6 (Report of Acreage) 
of the Basic Provisions (Sec. 457.8), you must report on or before 
the acreage reporting date contained in the Special Provisions for 
each planting period:
    (a) All the acreage of peppers in the county insured under this 
policy in which you have a share; and
    (b) The row width.
    7. Annual Premium.
    In lieu of the premium amount determinations contained in 
section 7 (Annual Premium) of the Basic Provisions (Sec. 457.8), the 
annual premium amount for each cultural practice (e.g. fall direct 
seeded irrigated) is determined by multiplying the third stage 
amount of insurance per acre by the premium rate for the cultural 
practice as established in the Actuarial Table, by the insured 
acreage, by your share at the time coverage begins, and by any 
applicable premium adjustment factors contained in the Actuarial 
Table.
    8. Insured Crop.
    In accordance with section 8 (Insured Crop) of the Basic 
Provisions (Sec. 457.8), the crop insured will be all the bell 
peppers in the county for which a premium rate is provided by the 
Actuarial Table:
    (a) In which you have a share;
    (b) That are:
    (1) Planted to be harvested and sold as mature fresh market bell 
peppers;
    (2) Planted within the planting periods designated in the 
Actuarial Table;
    (3) Grown under an irrigated practice;
    (4) Grown on acreage covered by plastic mulch except where the 
Special Provisions allow otherwise;
    (5) Grown by a person who in at least one of the three previous 
crop years:
    (i) Grew bell peppers for commercial sale; or
    (ii) Participated in managing a bell pepper farming operation;
    (c) That are not:
    (1) Interplanted with another crop;
    (2) Planted into an established grass or legume;
    (3) Pimento peppers; or
    (4) Grown for direct marketing.
    9. Insurable Acreage.
    (a) In lieu of the provisions of section 9 (Insurable Acreage) 
of the Basic Provisions (Sec. 457.8), that prohibit insurance 
attaching if a crop has not been planted in at least one of the 
three previous crop years, we will insure newly cleared land or 
former pasture land planted to fresh market peppers.
    (b) In addition to the provisions of section 9 (Insurable 
Acreage) of the Basic Provisions (Sec. 457.8):
    (1) You must replant any acreage of peppers damaged during the 
planting period in which initial planting took place whenever less 
than 50 percent of the plant stand remains: and
    (i) It is practical to replant;
    (ii) If, at the time the crop was damaged, the final day of the 
planting period has not passed; and
    (iii) The damage occurs within 30 days of transplanting or 60 
days of direct seeding.
    (2) Whenever peppers initially are planted during the fall or 
winter planting periods and the conditions specified in sections 
9(b)(1)(ii) and (iii) are not satisfied, you may elect:
    (i) To replant such acreage and collect any replant payment due 
as specified in section 12. The initial planting period coverage 
will continue for such replanted acreage.
    (ii) Not to replant such acreage and receive an indemnity based 
on the stage of growth the plants had attained at the time of 
damage. However, such an election will result in the acreage being 
uninsurable in the subsequent planting period.
    (3) We will not insure any acreage which, in the preceding 
planting period was planted to peppers (except as allowed in 
sections 9(b)(1) and (2)), tomatoes, eggplants, or tobacco unless 
the soil has been fumigated or otherwise properly treated.
    10. Insurance Period.
    In lieu of the provisions of section 11 (Insurance Period) of 
the Basic Provisions
    (Sec. 457.8), coverage begins on each unit or part of a unit the 
later of the date we accept your application, or when the peppers 
are planted in each planting period. Coverage ends at the earliest 
of:
    (a) Total destruction of the peppers on the unit;
    (b) Abandonment of the peppers on the unit;
    (c) The date harvest should have started on the unit on any 
acreage which will not be harvested;
    (d) Final adjustment of a loss on the unit;
    (e) Final harvest; or
    (f) The calendar date for the end of the insurance period as 
follows:
    (1) 165 days after the date of direct seeding or replanting with 
seed; and
    (2) 150 days after the date of transplanting or replanting with 
transplants.
    11. 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 during the 
insurance period:
    (1) Excess rain;
    (2) Fire;
    (3) Freeze;
    (4) Hail;
    (5) Tornado;
    (6) Tropical depression; or
    (7) Failure of the irrigation water supply, if caused by an 
insured cause of loss that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against any loss of production due to:
    (1) Disease;
    (2) Insect infestation; or
    (3) Failure to market the peppers, unless such failure is due to 
actual physical damage caused by an insured cause of loss that 
occurs during the insurance period.
    12. Replanting Payments.
    (a) In accordance with section 13 (Replanting Payment) of the 
Basic Provisions (Sec. 457.8), a replanting payment is allowed if, 
due to an insured cause of loss, more than 50 percent of the plant 
stand will not produce peppers and it is practical to replant.
    (b) The maximum amount of the replanting payment per acre will 
be the result obtained by multiplying $300.00 by your insured share.
    (c) In lieu of the provisions contained in section 13 
(Replanting Payment) of the Basic Provisions (Sec. 457.8), limiting 
a replanting payment to one each crop year, only one replanting 
payment will be made for acreage planted during each planting period 
within the crop year.
    13. Duties In The Event of Damage or Loss.
    In addition to the requirements contained in section 14 (Duties 
In The Event of Damage or Loss) of the Basic Provisions 
(Sec. 457.8), if you intend to claim an indemnity on any unit you 
also must give us notice not later than 72 hours after the earliest 
of:
    (a) The time you discontinue harvest of any acreage on the unit;
    (b) The date harvest normally would start if any acreage on the 
unit will not be harvested; or
    (c) The calendar date for the end of the insurance period.
    14. 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 unit, we will combine all optional units 
for which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled 
production to such units in proportion to our liability on the 
harvested acreage for each unit.
    (b) In the event of loss or damage covered by this policy, we 
will settle your claim by:
    (1) Multiplying the insured acreage in each stage by the amount 
of insurance per acre for the final stage;
    (2) Multiplying each result in section 14(b)(1) by the 
percentage for the applicable stage (see section 3(e));
    (3) Total the results of section 14(b)(2);
    (4) Subtracting either of the following values from the result 
of section 14(b)(3):
    (i) For other than catastrophic risk protection coverage, the 
total value of production to be counted (see section 14(c)); or
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) by:
    (A) Sixty percent for the 1998 crop year; or
    (B) Fifty-five percent for 1999 and subsequent crop years; and
    (5) Multiplying the result of section 14(b)(4) by your share.

[[Page 343]]

    (c) The total value of production to count from all insurable 
acreage on the unit will include:
    (1) Not less than the amount of insurance per acre for the stage 
for any acreage:
    (i) That is abandoned;
    (ii) Put to another use without our consent;
    (iii) That is damaged solely by uninsured causes; or
    (iv) For which you fail to provide acceptable production 
records;
    (2) The value of the following appraised production will not be 
less than the dollar amount obtained by multiplying the number of 
boxes of appraised peppers times the minimum value per box shown in 
the Special Provisions for the planting period:
    (i) Potential production on any acreage that has not been 
harvested the third time;
    (ii) Unharvested mature bell peppers (unharvested production 
that is damaged or defective due to insurable causes and is not 
marketable will not be counted as production to count);
    (iii) Production lost due to uninsured causes; 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) We may require you to continue to care for the crop so that 
a subsequent appraisal may be made or the crop harvested to 
determine actual production (If we require you to continue to care 
for the crop and you do not do so, the original appraisal will be 
used); or
    (B) You may elect to continue to care for the crop, in which 
case the amount of production to count for the acreage will be the 
harvested production, or our reappraisal if the crop is not 
harvested.
    (3) The total value of all harvested production from the 
insurable acreage will be the dollar amount obtained by subtracting 
the allowable cost contained in the Special Provisions from the 
price received for each box of peppers (this result may not be less 
than the minimum value shown in the Special Provisions for any box 
of peppers), and multiplying this result by the number of boxes of 
peppers harvested. Harvested production that is damaged or defective 
due to insurable causes and is not marketable, will not be counted 
as production to count.
    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 a written agreement must contain all 
variable terms of the contract between you and us that will be in 
effect if the written agreement is not approved;
    (c) If approved, the written agreement will include all variable 
terms of the contract, including, but not limited to, crop type or 
variety, and premium rate;
    (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 a 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.
    16. Minimum Value Option.
    (a) The provisions of this option are continuous and will be 
attached to and made a part of your insurance policy, if:
    (1) You elect either Option I or Option II of the Minimum Value 
Option on your application, or on a form approved by us, on or 
before the sales closing date for the initial crop year in which you 
wish to insure fresh market peppers under this option, and pay the 
additional premium indicated in the Actuarial Table for this 
optional coverage; and
    (2) You have not elected coverage under the Catastrophic Risk 
Protection Endorsement.
    (b) In lieu of the provisions contained in section 14(c)(3), the 
total value of harvested production will be determined as follows:
    (1) If you selected Option I of the Minimum Value Option, the 
total value of harvested production will be as follows:
    (i) For sold production, the dollar amount obtained by 
subtracting the allowable cost contained in the Special Provisions 
from the price received for each box of peppers (this result may not 
be less than $2.75 for any box of peppers), and multiplying this 
result by the number of boxes of peppers sold; and
    (ii) For marketable production that is not sold, the dollar 
amount obtained by multiplying the number of boxes of such peppers 
on the unit by the minimum value shown in the Special Provisions for 
the planting period (harvested production that is damaged or 
defective due to insurable causes and is not marketable will not be 
counted as production).
    (2) If you selected Option II of the Minimum Value Option, the 
total value of harvested production will be as provided in section 
16(b)(1), except that the dollar amount specified in section 
16(b)(1)(i) may not be less than zero.
    (c) This option may be canceled by either you or us for any 
succeeding crop year by giving written notice on or before the 
cancellation date preceding the crop year for which the cancellation 
of this option is to be effective.

    Signed in Washington, D.C., on December 24, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance.
[FR Doc. 97-61 Filed 1-2-97; 8:45 am]
BILLING CODE 3410-FA-P