[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Rules and Regulations]
[Pages 14786-14792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7941]


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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: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes 
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.

EFFECTIVE DATE: March 28, 1997.

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

SUPPLEMENTARY INFORMATION:

Executive Order No. 12866

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

Paperwork Reduction Act of 1995

    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments on information collection 
requirements previously approved by OMB under OMB control number 563-
0003 through September 30, 1998. No public comments were received.

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

[[Page 14787]]

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. 12988

    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 Friday, January 3, 1997, FCIC published a proposed rule in the 
Federal Register at 61 FR 338-343 to add to the Common Crop Insurance 
Regulations (7 CFR part 457), a new section, 7 CFR 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). 
This rule also amends 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.
    Following publication of the proposed rule, the public was afforded 
30 days to submit written comments, data and opinions. A total of 21 
comments were received from the crop insurance industry and FCIC 
Regional Service Offices (RSO). The comments received and FCIC's 
responses, are as follows:
    Comment: The crop insurance industry questioned removing the term 
``marketable'' from the definition of harvest. The commenter questioned 
the affect when the final stage of insurance on a unit can be triggered 
by the beginning of harvest, even if none of the crop is marketable.
    Response: The current regulation created confusion since it 
suggested that if the peppers were not marketable, they would not be 
considered as harvested for the purposes of determining the insurance 
period, calculation of any claim, etc. The picking of peppers on the 
unit, whether marketable or not, is considered harvested. The final 
stage of insurance on the unit begins when any peppers are harvested, 
whether marketable or not. Requirements of good farming practices will 
prevent harvest of the peppers before they are ready. Section 14 
contains provisions to determine the amount of production to be counted 
for harvested and unharvested, including peppers that are not 
marketable. Therefore, no change will be made to the definition.
    Comment: One comment from the crop insurance industry recommended 
clarifying the language in section 2(a) by stating ``Basic units, as 
defined in section 1 (Definitions) of the Basic Provisions, will be 
established by planting period.''
    Response: FCIC agrees with the comment and has amended section 2(a) 
to indicate a basic unit ``will be established by planting period.'' 
However, the definition of ``unit'' is contained in the Basic 
Provisions and no change will be made in that portion of the provision.
    Comment: One comment from the crop insurance industry stated that 
references to land measurements such as leagues and labors contained in 
section 2, Unit Division, was unnecessary. These types of land 
measurement were not applicable in Florida and fresh market pepper crop 
insurance is only available in Florida.
    Response: Fresh market pepper insurance may be expanded into other 
areas where such measurements are applicable. Therefore, no changes 
will be made.
    Comment: The crop insurance industry questioned if it was necessary 
to specify in section 3(c) that the CAT amount of insurance will be in 
the Actuarial Table when all available amounts of insurance are 
specified section 3(a).
    Response: FCIC agrees section 3(a) states the coverage levels and 
amounts of insurance are contained in the Actuarial Table. As section 
3(c) provides no additional statements or requirements, FCIC has 
deleted this provision and renumbered the remaining provisions.
    Comment: One comment from the crop insurance industry stated 
section 3 of the crop provisions contained a heading in the stage chart 
that was misleading. The chart heading suggested the percentages 
represented coverage levels that the insured would select rather than 
the amount of insurance that is selected by the insured. The commenter 
suggested the chart heading should state, ``Percent in effect of your 
amount of insurance.''
    Response: FCIC believes the heading of the stage chart is clearly 
stated. Therefore, no change will be made.
    Comment: One comment received from an FCIC RSO recommended 
clarifying the Basic Provisions, by adding a provision in section 6 to 
state that the insured must report the dates the insured acreage was 
planted within each planting period.
    Response: FCIC concurs with the comment and had added a provision 
accordingly.
    Comment: The crop insurance industry recommended a grammatical 
change in section 7, to add a comma and hyphen in ``e.g., fall direct-
seeded irrigated.''
    Response: FCIC agrees with the comment and has amended the 
provision in section 7 accordingly.
    Comment: The crop insurance industry questioned if the provision in 
section 9(a) that states we will insure

[[Page 14788]]

newly cleared land or former pasture land planted to fresh market 
peppers is new to the crop provisions and if a waiting period was 
applicable before insuring fresh market peppers on newly cleared land 
or former pasture land.
    Response: To provide consistency among the fresh market vegetable 
crops, FCIC clarified that former pasture land planted to the insured 
crop is also insurable. It is a recommended practice for the fresh 
market vegetable crops to be planted on newly cleared and former 
pasture land so no waiting period is required prior to planting the 
insured crop.
    Comment: One comment from the crop insurance industry stated 
section 9(b)(3) was confusing due to the ``except as allowed in section 
9(b) (1) and (2)'', and they could not determine what was or was not 
allowed. The commenter stated that if it was intended to allow coverage 
without fumigation on peppers planted in the next planting period after 
peppers were planted but not carried to harvest the previous period, 
then the exception should only refer to section 9(b)(2)(ii). Provisions 
contained in section 9(b) (1) and (2) refer to peppers planted and 
replanted and it would seem that fumigation would be necessary before 
planting peppers again the following planting period. If the exceptions 
in section 9(b) applied to peppers following peppers, why wouldn't the 
exceptions also apply to peppers following tomatoes, eggplants or 
tobacco?
    Response: Acreage previously planted to peppers, tomatoes, 
eggplants or tobacco may host nematodes that will damage the insured 
crop. Chemicals that are used to fumigate or treat the acreage will 
last two to three months. However, in those situations where the crop 
was destroyed shortly after planting and is replanted, there is little 
risk from nematodes and fumigation is not required. FCIC has amended 
the provisions to clarify that fumigation is required whenever the crop 
was previously planted to peppers, tomatoes, eggplants or tobacco and 
that it does not apply to replanted peppers.
    Comment: The crop insurance industry questioned if the phrase 
``coverage begins * * * the later of the date we accept your 
application, or when the peppers are planted in each planting period'' 
means that an application could be accepted after the sales closing to 
have coverage for subsequent planting periods in the crop year. If so, 
what is the purpose of having one sales closing date for the crop?
    Response: Section 10 of these provisions do not alter the 
requirement contained in the Basic Provisions, which states the 
application must be submitted by the sales closing date. The sales 
closing date corresponds to the earliest planting period, so only one 
application is filed for the crop year and covers all subsequent 
planting periods. Since there are multiple planting periods in each 
crop year, the date insurance attaches in each planting period must be 
established. Provisions in section 10 simply clarify when insurance 
will attach. Therefore, no change will be made.
    Comment: One comment from the crop insurance industry questioned if 
it was valid to extend the end of the insurance period for Florida from 
150 days to 165 days after the date of direct seeding.
    Response: In addition to allowing expansion of fresh market pepper 
insurance coverage into other areas, FCIC's RSO obtained data from the 
University of Florida Research Center that indicated direct seeded 
peppers required an additional 15 days more than transplanted peppers 
to reach maturity. This change provides assurance that all mature 
production will be included as production to count.
    Comment: Two comments from the crop insurance industry recommended 
the cause of loss due to tropical depression be changed to ``excessive 
winds sufficient to damage the crop.'' The change would provide 
coverage for damage due to winds associated with stalled fronts, severe 
thunderstorms, storms or gales. One of the commenters indicated a 
stalled high and low pressure system with winds in excess of 60 mph 
caused damage in November, 1996, which was not covered by the current 
insurance policy.
    Response: The current regulation defined a tropical depression as a 
large-scale, atmospheric wind-and-pressure system characterized by low 
pressure at its center and counterclockwise circular wind motion. FCIC 
agrees that damage to the insured crop may occur from systems other 
than a tropical depression. FCIC clarified the definition of tropical 
depression to state that it is a system identified by the U.S. Weather 
Service, and includes tropical depressions, hurricanes, tropical storms 
and gales. Therefore, no change will be made.
    Comment: Two comments from the crop insurance industry recommended 
removing disease and insect infestation as uninsured causes of loss. 
The commenters suggested that disease and insects should be an insured 
cause of loss if a producer exhausts all reasonable means to protect 
the crop. This would provide coverage for new diseases and insects that 
cannot presently be controlled by the chemicals that are available.
    Response: FCIC agrees that coverage should be available for damage 
due to disease and insect infestation for which no effective control 
measure exists. Therefore, FCIC has amended the provisions contained in 
section 11(b)(1) accordingly.
    Comment: Two comments from the crop insurance industry recommend 
raising the maximum amount of the replanting payment per acre. Both 
commenters stated the maximum amount provided in the current policy is 
not sufficient to cover actual costs.
    Response: FCIC agrees there may be instances when replanting costs 
exceed $300.00 per acre as provided in the current regulation. 
Therefore, provisions contained in section 12(b) have been revised to 
state that the maximum amount of the replanting payment per acre will 
be the lesser of your actual cost of replanting, or the result obtained 
by multiplying the maximum amount of the replanting payment contained 
in the applicable Special Provisions by your insured share.
    Comment: Two comments from the crop insurance industry questioned 
if the dollar amount of the allowable cost contained in the Special 
Provisions has been reviewed to determine if the cost is sufficient. 
One of the commenters recommended raising the allowable cost by $.50.
    Response: The amount of allowable costs are provided in the Special 
Provisions to allow the flexibility to set the amount at appropriate 
levels. Therefore, no changes will be made.
    Comment: The crop insurance industry suggested combining the 
provisions contained in section 15(e) with the provisions in section 
15(a).
    Response: Approval of written agreements requested after the sales 
closing date is the exception, not the rule. Therefore, these 
provisions should be kept separate and no changes have been made.
    Comment: The crop insurance industry recommended 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 written agreements 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

[[Page 14789]]

important to minimize exceptions to assure that the insured is well 
aware of the specific terms of the policy. Therefore, no changes will 
be made.
    In addition to the changes described above, FCIC has made the 
following change to the Fresh Market Pepper Crop Provisions:
    1. Section 16(b)(1)(i)--Delete $2.75 as the specified lowest dollar 
amount obtained when computing the minimum value per box of peppers 
sold. The minimum value option price will now be contained in the 
Special Provisions to allow FCIC to ensure that the price is correct 
for the county.
    Good cause is shown to make this rule effective upon publication in 
the Federal Register. This rule improves the fresh market pepper 
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 April 30, 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 make the rule effective upon publication.

List of Subjects in 7 CFR Parts 445 and 457

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

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation hereby amends 7 CFR parts 445 and 457 effective 
for the 1998 and succeeding crops, to read 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 headings 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. Section 457.148 is added 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:

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 annum 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.
    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.

[[Page 14790]]

    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) In addition to the requirement contained in section 1 
(Definitions) of the Basic Provisions (Sec. 457.8), (basic unit), a 
basic unit will also be established by planting period.
    (b) Unless limited by the Special Provisions, 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 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.
    (d) The amounts of insurance per acre are progressive by stages 
as follows:

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

    (e) 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;
    (b) The dates the acreage was planted within each planting 
period; and
    (c) 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

[[Page 14791]]

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 on which peppers (except for 
replanted peppers in accordance with sections 9(b)(1) and (2)), 
tomatoes, eggplants, or tobacco have been grown and the soil was not 
fumigated or otherwise properly treated before planting peppers.

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 or insect infestation, unless no effective control 
measure exists for such disease or insect infestation; or
    (2) 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 lesser of your actual cost of replanting or the result 
obtained by multiplying the per acre replanting payment amount 
contained in the Special Provisions by your insured share.
    (c) In lieu of the provisions contained in section 13 
(Replanting Payment) of the Basic Provisions (Sec. 457.8), that 
limit 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(d));
    (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.
    (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 by 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

[[Page 14792]]

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 the minimum value option price contained in the Special 
Provisions 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, DC, on March 24, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance.
[FR Doc. 97-7941 Filed 3-27-97; 8:45 am]
BILLING CODE 3410-FA-P