[Federal Register Volume 61, Number 81 (Thursday, April 25, 1996)]
[Proposed Rules]
[Pages 18293-18299]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10145]



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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 61, No. 81 / Thursday, April 25, 1996 / 
Proposed Rules

[[Page 18293]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AB03


Common Crop Insurance Regulations; Pear Crop Insurance Provisions

AGENCY: Federal Crop Insurance Corporation.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes 
specific crop provisions for the insurance of Pears. The provisions 
will be used in conjunction with the Common Crop Insurance Policy Basic 
Provisions which contains 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 and to include the current pear 
endorsement with the Common Crop Insurance Policy for ease of use and 
consistency of policy terms.

DATES: Written comments, data, and opinions on this proposed rule will 
be accepted until close of business May 28, 1996 and will be considered 
when the rule is to be made final. The comment period for information 
collection under the Paperwork Reduction Act of 1995 continues through 
June 24, 1996.

ADDRESSES: Interested persons are invited to submit written comments to 
the Chief, Program Development Branch, Federal Crop Insurance 
Corporation (FCIC), Farm Service Agency (FSA), United States Department 
of Agriculture (USDA), 9435 Holmes Road, Kansas City, MO 64131. Written 
comments will be available for public inspection and copying in room 
0324, South Building, USDA, 14th and Independence Avenue SW., 
Washington, D.C., 8:15 a.m.-4:45 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Louise Narber, Program Analyst, 
Research and Development Division, Product Development Branch, FCIC, 
FSA, USDA, 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 and Departmental Regulation 1512-1

    This action has been reviewed under United States Department of 
Agriculture (USDA) procedures established by Executive Order 12866 and 
Departmental Regulation 1512-1. This action constitutes a review as to 
the need, currency, clarity, and effectiveness of these regulations 
under those procedures. The sunset review date established for these 
regulations is February 1, 2001.
    This rule has been determined to be exempt for the purposes of 
Executive Order 12866 and therefore has not been reviewed by the Office 
of Management and Budget (OMB).

Paperwork Reduction Act of 1995

    The information collection requirements contained in these 
regulations were previously approved by OMB pursuant to the Paperwork 
Reduction Act of 1995 (44 U.S.C. Chapter 35) under OMB control number 
0563-0003 through September 30, 1998.
    The amendments set forth in this proposed rule do not contain 
additional information collections that require clearance by the Office 
of Management and Budget under the provisions of 44 U.S.C. Chapter 35.
    The title of this information collection is ``Catastrophic Risk 
Protection Plan and Related Requirements including, Common Crop 
Insurance Regulations; Pear Crop Insurance Provisions.'' The 
information to be collected includes: a crop insurance acreage report, 
an insurance application and a continuous contract. Information 
collected from the acreage report and application is electronically 
submitted to FCIC by the reinsured companies. Potential respondents to 
this information collection are growers of pears that are eligible for 
Federal crop insurance.
    The information requested is necessary for the insurance company 
and FCIC to provide insurance, provide reinsurance, determine 
eligibility, 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.
    The comment period for information collections under the Paperwork 
Reduction Act of 1995 continues through June 24, 1996, for 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 technology.
    Comments should be submitted to the Desk Officer for Agriculture, 
Office of Information and Regulatory Affairs, Office of Management and 
Budget (OMB), Washington, D.C. 20503 and to Bonnie Hart, Advisory and 
Corporate Operations Staff, Regulatory Review Group, Farm Service 
Agency, P.O. Box 2415, Ag Box 0572, U.S. Department of Agriculture, 
Washington, D.C. 20013-2415, telephone (202) 690-2857. Copies of the 
information collection may be obtained from Bonnie Hart at the above 
address.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, FCIC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, or tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
1 year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires FCIC to identify and consider a reasonable 
number of regulatory

[[Page 18294]]

alternatives and adopt the least costly, more cost-effective or least 
burdensome alternative that achieves the objectives of the rule.
    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 12612

    It has been determined under section 6(a) of Executive Order 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. 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. If the insured elects to use actual records of acreage and 
production as the basis for the production guarantee, the insured may 
elect to report this information on a yearly basis. This regulation 
does not alter those requirements. Therefore, the amount of work 
required of the insurance companies and FSA offices 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 insured. Therefore, this action is determined 
to be exempt from the provisions of the Regulatory Flexibility Act (5 
U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372 which require intergovernmental consultation with State and local 
officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in subsections 2(a) 
and 2(b)(2) of Executive Order 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 of the National Appeals Division published in 7 CFR 
part 11 must be exhausted before 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 part 457.111, Pear Crop Insurance 
Provisions. The provisions will be effective for the 1997 and 
succeeding crop years. The proposed Pear Crop Insurance provisions will 
replace the provisions found at 7 CFR part 401.140 (Pear Endorsement). 
Upon publication of 7 CFR part 457.111 as a final rule, the provisions 
for insuring pears contained herein will supersede the current 
provisions contained in 7 CFR part 401.140. By separate rule, FCIC will 
revise 7 CFR part 401.140 to limit its effect to the 1996 crop year and 
later remove that section.
    This rule makes minor editorial and format changes to improve the 
Pear Crop Insurance Endorsement's compatibility with the Common Crop 
Insurance Policy. In addition, FCIC is proposing substantive changes in 
the provisions for insuring pears as follows:
    1. The Pacific Northwest grows several varieties of pears in 
addition to Green Bartletts; however, other areas primarily grow Green 
Bartletts. Therefore, varietal groups will be identified in the Special 
Provisions and all references to type I and type II have been deleted.
    2. Section 1--Add definitions for ``culls,'' ``days,'' ``direct 
marketing,'' ``good farming practices,'' ``interplanted,'' ``irrigated 
practice,'' ``marketable,'' ``production guarantee (per acre),'' 
``varietal group,'' and ``written agreement'' for clarification 
purposes.
    3. Section 2--Specify that optional units may be established by 
section, section equivalent, or FSA Farm Serial Number; or by acreage 
located on non-contiguous land, but not by both. This policy is 
consistent with some other perennial crop provisions. Optional units 
also may be established by varietal group when authorized by the 
Special Provisions. The provision in section 7 of the Pear Endorsement 
that prevented interplanted acreage of type I and type II from being 
divided into separate units has been deleted because two or more 
varieties which are interplanted may now be separate units. Production 
records from each variety are kept separate and many varieties do not 
mature at the same time. It is not realistic or necessary to allow 
units by blocks of different varieties but not allow units when 
different varieties are interplanted within a block.
    4. Section 3(a)--Clarify that an insured may select only one price 
election for all the pears in the county insured under this policy, 
unless the Special Provisions provide different price elections by 
varietal group in which case the insured may select one price election 
for each varietal group designated in the Special Provisions. Each 
price election chosen for each varietal group must have the same 
percentage relationship to the maximum price offered by the insurer.
    5. Section 3(b)--Add provisions for reporting the age and type, if 
applicable, of any interplanted perennial crop, its planting pattern, 
and any other information needed to establish the yield upon which the 
production guarantee is based. If the insured fails to notify the 
insurer of factors that may reduce yields from previous levels, the 
insurer will reduce the production guarantee at any time the insurer 
becomes aware of damage, removal of trees, or changes in practices. 
Interplanting is not allowed under the current Pear Endorsement.
    6. Section 4--Change the contract change date in California from 
August 31 to October 31 to be consistent with other perennial crops in 
California.
    7. Section 5--Change the cancellation and termination dates in 
California from November 20 to January 31 to be consistent with other 
perennial crops in California.
    8. Section 6--Specify that to be insurable, the pears must be grown 
on trees that have produced an average of at least 5 tons per acre, in 
at least 1 of

[[Page 18295]]

the 4 previous crop years unless the Special Provisions or a written 
agreement set a lower threshold. Previous provisions required that the 
type must produce an average of 4 tons of pears per acre of first grade 
canning or U.S. Number 1 in at least 1 of the 4 previous crop years to 
be insurable. The change to 5 tons per acre is being proposed as more 
characteristic of an orchard reaching a level of production which 
should continue on an up trend. Four tons per acre is not an adequate 
indicator that the orchard has passed problems typical of a new 
orchard. The ``of first grade canning or U.S. Number 1'' requirement 
will be eliminated because it does not include U.S. No. 2 grade pears 
that are included in the production to count. The provision that 
required acceptable production records for insurance to attach also 
will be eliminated because if the insured does not provide acceptable 
records of production the guarantee may be based on a transitional 
yield in accordance with Actual Production History regulations 
published at 7 CFR part 400, subpart G.
    9. Section 7--Add a provision to make interplanted pears insurable 
if planted with another perennial crop unless the insurance provider 
inspects the acreage and determines it does not qualify to be accepted 
for insurance coverage. This provision was added to provide insurance 
coverage to the maximum extent to all pear producers, and to reduce the 
number of acres that would require coverage under the Non-insured 
Assistance Program (NAP).
    10. Section 8--Modify the insurance period in California so 
coverage will begin the later of the date the application is accepted 
or February 1, instead of November 21, since the cancellation and 
termination dates were changed to January 31 and the contract change 
date was changed to October 31. Provisions also were added for insuring 
acreage when an insurable share is acquired or relinquished on or 
before the acreage reporting date. Under the current Pear Endorsement 
for acreage acquired (for which an application is in place) on or 
before the acreage reporting date, coverage would attach at the time 
the insurer considers the crop inspection as being acceptable provided 
it was on or after November 21. In the same situation under these new 
provisions (in all States except California), coverage will have 
started on November 21 even if the insurer considers the inspection as 
being acceptable on January 14. Under the current Pear Endorsement for 
acreage relinquished on or before the acreage reporting date but after 
coverage had attached, the premium would still be due from the insured 
even if the insured no longer had an insurable interest. In the same 
situation under these new provisions, insurance will not be considered 
to have attached so the premium will not be due unless a transfer of 
right to an indemnity was completed.
    11. Section 9(a)--Add adverse weather conditions as a cause of loss 
and delete drought, excess wind, freeze, frost, fruit-set failure and 
hail because they are included by the term adverse weather. Also add a 
clause to the insurable cause of loss ``failure of the irrigation water 
supply'' to limit it to a cause of loss covered by this policy.
    12. Section 9(b)--Add disease and insect infestation to the 
excluded causes of loss unless adverse weather prevents the proper 
application of control measures, causes control measures to be 
ineffective when properly applied, or no effective control mechanism is 
available for such disease or insect infestation. These exclusions need 
to be added for clarification so that insurance coverage is not 
provided for causes of loss that could be prevented.
    13. Section 10--Require the producer to give notice within 3 days 
of the date harvest should have started if the crop will not be 
harvested. It also requires the producer to give notice at least 15 
days prior to harvest so a preharvest inspection can be made if the 
insured intends to sell fruit directly to retail customers in any 
manner. This appraisal may be used to determine the amount of 
production to count in a loss situation.
    14. Section 11--Add a provision explaining when potential 
production on abandoned acreage will be included in total production to 
count. If the insured and the insurer agree on potential production on 
acreage the insured wishes to abandon or no longer care for, the 
insurance period for that acreage will end. If agreement is not 
reached, the claim may be deferred if the insured agrees to continue to 
care for the crop. The insurance provider will make another appraisal 
when the insured notifies them of further damage or that harvest is 
generally occurring in the area unless the crop is harvested in which 
case the harvested production will be used to determine the production 
to count. If the insured does not continue to care for the crop, the 
appraisal made prior to deferring the claim will be used to determine 
the production to count. Also for purposes of settling a claim in all 
States except California, the production to count is all the harvested 
and appraised marketable production. There is no adjustment for quality 
unless the ``Quality Adjustment Endorsement'' is elected. For 
California, references to the California Tree Fruit Agreement 
Standards, which is obsolete, have been changed to the California Pear 
Advisory Board.
    15. Section 12--Add provisions for providing insurance coverage by 
written agreement. FCIC has a long-standing policy of permitting 
modification of insurance contracts by written agreement. This 
provision is not documented in the current Pear Endorsement. Section 12 
will discuss application for, and duration of, written agreements.
    16. Section 13--Provide for a quality adjustment endorsement for 
all States, except California, if the insured meets the following: has 
limited or additional coverage, pays the additional premium, the pears 
are damaged by volcano eruption, frost, freeze, wind or hail, and the 
endorsement is timely elected. The current pear provisions, without a 
quality adjustment endorsement, are appropriate in California because 
the primary marketing intent for pears grown in California is for fresh 
pack and then to market the pears that do not make U.S. No. 1 as 
processing or as juice. Also the California pear growers generally have 
records available for the most recent crop year in the base period. In 
the Pacific Northwest records for the most recent crop year in the base 
period are not available as winter pears go into controlled atmospheric 
storage and may not sell or be graded until well into the next calendar 
year. Also, the Pacific Northwest has widespread fire blight problems, 
and the quality adjustment endorsement will allow a more reflective 
yield of the orchards.

List of Subjects in 7 CFR Part 457

    Crop insurance, Pears.

Proposed Rule

    Pursuant to the authority contained in the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance 
Corporation hereby proposes to amend the Common Crop Insurance 
Regulations (7 CFR 457), effective for the 1997 and succeeding crop 
years, as follows:

PART 457--[AMENDED]

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

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

    2. 7 CFR 457 is amended by adding a new Sec. 457.111 to read as 
follows:

[[Page 18296]]

Sec. 457.111  Pear Crop Insurance Provisions.

    The Pear Crop Insurance Provisions for the 1997 and succeeding crop 
years are as follows:

United States Department of Agriculture

Federal Crop Insurance Corporation

Pear 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
    Culls--Pears that do not meet the requirements of U.S. No. 2 grade 
or better.
    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 or a 
farmer's market, and permitting the general public to enter the 
field(s) for the purpose of picking all or a portion of the crop.
    FSA--Farm Service Agency of the United States Department of 
Agriculture.
    Good farming practices--The cultural practices generally in use in 
the county for the crop to make normal progress toward maturity and 
produce at least the yield used to determine the production guarantee 
and are those generally recognized by the Cooperative Extension Service 
as compatible with agronomic and weather conditions in the county.
    Harvest--The picking of mature pears from the trees or the 
collecting of marketable pears from the ground.
    Interplanted--Acreage on which two or more crops are planted in any 
form of alternating or mixed pattern.
    Irrigated practice--A method of producing a crop by which water is 
artificially applied during the growing season by appropriate systems 
and at the proper times, with the intention of providing the quantity 
of water needed to produce at least the yield used to establish the 
irrigated production guarantee on the irrigated acreage planted to the 
insured crop.
    Marketable--Pear production acceptable for processing or other 
human consumptive use even if it does not meet any U.S. or applicable 
state grading standard.
    Non-contiguous land--Any land owned by you or rented by you for any 
consideration other than a share in the insured crop, whose boundaries 
do not touch at any point. Land that is separated only by a public or 
private right-of-way, waterway or irrigation canal will be considered 
to be touching.
    Production guarantee (per acre)--The quantity of pears (in tons) 
determined by multiplying the approved yield per acre by the coverage 
level percentage you elect, and multiplying the result by any 
applicable adjustment factor provided for in section 6(b)(f) of the 
Basic Provisions (Sec. 457.8).
    Ton--Two thousand (2,000) pounds avoirdupois.
    Varietal Group--Types of pears with similar characteristics that 
are grouped for insurance purposes as specified in the Special 
Provisions.
    Written agreement--A written document that alters designated terms 
of a policy.
2. Unit Division
    Unless limited by the Special Provisions, a unit as defined in 
section 1 (Definitions) of the Basic Provisions (Sec. 457.8) (basic 
unit), may be divided into optional units if, for each optional unit 
you meet all the conditions of this section or if a written agreement 
to such division exists. Basic units may not be divided into optional 
units on any basis including, but not limited to, production practice, 
type, and variety, other than as described in this section. 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, that portion of 
the premium paid for the purpose of electing optional units will be 
refunded to you pro rata for the units combined. All optional units 
must be identified on the acreage report for each crop year.
    (a) The following requirements must be met for each optional unit:
    (1) You must have records, which can be independently verified, of 
acreage and production for each optional unit for at least the last 
crop year used to determine your production guarantee; and
    (2) 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.
    (b) Each optional unit must meet one or more of the following 
criteria as applicable:
    (1) Optional Units by Section, Section Equivalent, or Farm Service 
Agency (FSA) Farm Serial Number: Optional units may be established if 
each optional unit is 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; or
    (2) Optional Units on Acreage Located on Non-Contiguous Land: 
Instead of establishing optional units by section, section equivalent 
or FSA Farm Serial Number, optional units may be established if each 
optional unit is located on non-contiguous land.
    (3) Optional Units on Acreage by Varietal Group: In addition to, or 
instead of, establishing optional units by section, section equivalent, 
FSA Farm Serial Number, or on non-contiguous land, optional units may 
be established by varietal Group when provided for in the Special 
Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities
    In addition to the requirements of section 3 (Insurance Guarantees, 
Coverage Levels, and Prices for Determining Indemnities) of the Basic 
Provisions (Sec. 457.8):
    (a) You may select only one price election for all the pears in the 
county insured under this policy unless the Special Provisions provide 
different price elections by varietal group, in which case you may 
select one price election for each varietal group designated in the 
Special Provisions. The price election you choose for each varietal 
group must have the same percentage relationship to the maximum price 
offered by us for each varietal group. For example, if you choose one 
hundred percent (100%) of the maximum price election for a specific 
varietal group, you must also choose one hundred percent (100%) of the

[[Page 18297]]

maximum price election for all other varietal groups.
    (b) You must report, by the production reporting date designated in 
section 3 (Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities) of the Basic Provisions (Sec. 457.8), by 
varietal group:
    (1) Any damage, removal of trees, or change in practices that may 
reduce yields from previous levels, and the number of affected acres;
    (2) The number of trees on insurable and uninsurable acreage;
    (3) The age of the trees and the planting pattern; and
    (4) For the first year of insurance for acreage interplanted with 
another perennial crop and anytime the planting pattern of such acreage 
is changed:
    (i) The age of the interplanted crop, and type if applicable;
    (ii) The planting pattern; and
    (iii) Any other information that we request in order to establish 
your approved yield.
    We will reduce the yield used to establish your production 
guarantee as necessary, based on the effect of the interplanted 
perennial crop, removal of trees, damage, or change in practices on the 
yield potential of the insured crop. If you fail to notify us of 
factors that may reduce yields from previous levels, we will reduce 
your production guarantee as necessary at any time we become aware of 
the interplanted crop, removal of trees, damage, or change in 
practices.
4. Contract Changes
    The contract change date is October 31 preceding the cancellation 
date for states with a January 31 cancellation date and August 31 
preceding the cancellation date for all other states (see the 
provisions of section 4 (Contract Changes) of the Basic Provisions 
(Sec. 457.8)).
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:

------------------------------------------------------------------------
                                            Cancellation and termination
                  States                                dates           
------------------------------------------------------------------------
California................................  January 31.                 
All other states..........................  November 20.                
------------------------------------------------------------------------

6. Insured Crop
    In accordance with section 8 (Insured Crop) of the Basic Provisions 
(Sec. 457.8), the crop insured will be all the pears in the county for 
which a premium rate is provided by the actuarial table:
    (a) In which you have a share;
    (b) That are of varieties adapted to the area;
    (c) That are grown on trees that have produced an average of at 
least five (5) tons of pears per acre in at least one of the four 
previous crop years unless the Special Provisions or a written 
agreement authorizes lesser production; and
    (d) That are grown in an orchard that, if inspected, is considered 
acceptable by us.
7. Insurable Acreage
    In lieu of the provisions in section 9 (Insurable Acreage) of the 
Basic Provisions (Sec. 457.8), that prohibit insurance attaching to a 
crop planted with another crop, pears interplanted with another 
perennial crop are insurable unless we inspect the acreage and 
determine it does not meet insurability requirements.
8. Insurance Period
    (a) In accordance with the provisions of section 11 (Insurance 
Period) of the Basic Provisions (Sec. 457.8):
    (1) Coverage begins for each crop year on the later of the date we 
accept your application or:
    (i) In California, on February 1; or
    (ii) In all other states, on November 21.
    (2) The calendar date for the end of the insurance period for each 
crop year is:
    (i) September 15 for Bartlett (green and red) and Star Crimson 
(Crimson Red) varietal groups; or
    (ii) October 15 for all other varietal groups.
    (b) In addition to the provisions of section 11 (Insurance Period) 
of the Basic Provisions (Sec. 457.8):
    (1) If you acquire an insurable share in any insurable acreage on 
or before the acreage reporting date of any crop year and if we 
inspect, and consider the acreage acceptable, insurance will be 
considered to have attached to such acreage on the calendar date for 
the beginning of the insurance period.
    (2) If you relinquish your insurable interest on any acreage of 
pears on or before the acreage reporting date of any crop year 
insurance will not be considered to have attached to such acreage for 
that crop year unless:
    (i) A transfer of right to an indemnity or a similar form approved 
by us is completed by all affected parties; and
    (ii) The insurance provider is notified by you or the transferee in 
writing of such transfer on or before the acreage reporting date.
9. Causes of Loss
    (a) In accordance with the provisions of section 12 (Causes of 
Loss) of the Basic Provisions (Sec. 457.8), insurance is provided only 
against the following causes of loss that occur within the insurance 
period:
    (1) Adverse weather conditions;
    (2) Fire, unless weeds and other forms of undergrowth have not been 
controlled or pruning debris has not been removed from the orchard;
    (3) Earthquake;
    (4) Volcanic eruption; or
    (5) Failure of the irrigation water supply, if caused by an insured 
peril that occurs during the insurance period.
    (b) In addition to the causes of loss excluded in section 12 
(Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not 
insure against damage or loss of production due to:
    (1) Disease or insect infestation, unless adverse weather:
    (i) Prevents the proper application of control measures or causes 
properly applied control measures to be ineffective; or
    (ii) Causes disease or insect infestation for which no effective 
control mechanism is available.
    (2) Failure of the fruit to color properly; or
    (3) Inability to market the pears for any reason other than actual 
physical damage from an insurable cause specified in this section. For 
example, we will not pay you an indemnity if you are unable to market 
due to quarantine, boycott, or refusal of any person to accept 
production.
10. Duties in the Event of Damage or Loss
    In addition to the requirements of section 14 (Duties in the Event 
of Damage or Loss) of the Basic Provisions (Sec. 457.8), the following 
will apply:
    (a) You must notify us within 3 days of the date harvest should 
have started if the crop will not be harvested.
    (b) You must notify us at least 15 days before harvest begins if 
any production from any unit will be marketed directly to consumers. We 
will conduct a preharvest appraisal that will be used to determine your 
production. If damage occurs after the preharvest appraisal, and you 
can provide acceptable records to us that account for all production 
removed from the unit after our appraisal, we will conduct an 
additional appraisal that will be used to determine your production. 
Failure to give timely notice that production will be marketed directly 
to consumers will result in an appraised amount of production to count 
of not less than the production guarantee per acre.
    (c) If you intend to claim an indemnity on any unit, you must 
notify us prior to the beginning of harvest so

[[Page 18298]]

that we may inspect the damaged production. You must not sell or 
dispose of the damaged crop until after we have given you written 
consent to do so. If you fail to meet the requirements of this 
subsection, all such production will be considered undamaged and 
included as production to count.
11. Settlement of Claim
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide production records:
    (1) For any optional unit, we will combine all optional units for 
which acceptable records of production 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 by its respective production 
guarantee;
    (2) Multiplying each product by the respective price election;
    (3) Summing all such products;
    (4) Multiplying the total production to be counted of each varietal 
group (see subsection 11(c)) by the respective price election;
    (5) Summing all such products;
    (6) Subtracting this total from the total in (3); and
    (7) Multiplying the result by your share.
    (c) The total production to count (in tons) 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) Damaged solely by uninsured causes; or
    (C) For which you fail to provide production records that are 
acceptable to us;
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; and
    (iv) Potential production on acreage that you intend to abandon or 
no longer care for, if you and we agree on the appraised amount of 
production. Upon such agreement, the insurance period for that acreage 
will end. If you do not agree with our appraisal, we may defer the 
claim only if you agree to continue to care for the crop. We will then 
make another appraisal when you notify us of further damage or that 
harvest is generally occurring in the area unless you harvested the 
crop, in which case we will use the harvested production. If you do not 
continue to care for the crop, our appraisal made prior to deferring 
the claim will be used to determine the production to count; and
    (2) For all states except California, all harvested and appraised 
marketable pear production from the insurable acreage.
    (3) For California, all harvested and appraised production that:
    (i) Meets the standards for first grade canning as defined by the 
California Pear Advisory Board or for U.S. Number 1 as defined by the 
United States Standards for Grades of Summer and Fall Pears, or Pears 
for Processing, or for U.S. Extra Number 1 or U.S. Number 1 as defined 
by the United States Standards for Grades of Winter Pears; or
    (ii) Is accepted by a processor for canning or packing; or
    (iii) Is marketable for any purpose.
    (4) For California, notwithstanding the terms of 11(c)(3), if the 
cause of loss was due to an insurable cause, the quantity of production 
that otherwise would be considered as production to count will be 
reduced by whichever of the following methods results in the least 
production to count:
    (i) By the excess over ten percent (10%) of the total production 
from the unit of varieties other than Forelle, Seckel or Winter Nelis 
that is size 180 or smaller as defined in the United States Standards 
for Summer and Fall Pears or for Winter Pears; or
    (ii) By dividing the value per ton by the highest price election 
available for the insured varietal group that does not meet the 
specifications of section 11(c)(3)(i), subtracting this result from 
1.000, multiplying this difference by the number of tons of such pears 
and subtracting this result from the production to count.
12. Written Agreements
    Designated terms of this policy may be altered by written 
agreement. The following conditions will apply:
    (a) You must apply in writing for each written agreement no later 
than the sales closing date, except as provided in subsection (e) of 
this section.
    (b) The application for written agreement must contain all 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, the guarantee, premium rate, and price election.
    (d) Each written agreement will only be valid for 1 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.
    (e) An application for written agreement submitted after the sales 
closing date may be approved if, after a physical inspection of the 
acreage, it is determined that no loss has occurred and the crop is 
insurable in accordance with the policy provisions.
13. Pear Quality Adjustment Endorsement
    (a) The provisions of this endorsement apply if:
    (1) You elect the Pear Quality Adjustment Endorsement 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 your pears 
under this endorsement. By doing so, you agree to pay the additional 
premium designated in the actuarial table for this optional coverage; 
and
    (2) This endorsement is not excluded by your policy.
    (b) This endorsement is available in all counties for which the 
actuarial table designates pear premium rates, except for counties in 
California. This endorsement does not cover acreage insured under the 
Catastrophic Risk Production Endorsement in any counties.
    (c) Pears damaged by volcano eruption; frost; freeze; wind; or hail 
are eligible for quality adjustment, subject to the following:
    (1) If the harvested and appraised production does not grade eighty 
percent (80%) U. S. No. 2 or better in accordance with applicable 
United States Standards for Grades of Summer and Fall Pears, United 
States Standards for Grades of Winter Pears, or United States Standards 
for Grades of Pears for Processing, as applicable, production will be 
reduced as follows:
    (i) By two percent (2%) for each full one percent (1%) in excess of 
twenty percent (20%), when twenty-one percent (21%) through sixty 
percent (60%) of the pears fail the grade standard; and
    (ii) By one hundred percent (100%) when more than sixty percent 
(60%) of the pears fail the grade standard. The difference between the 
reduced production and the total production will be considered cull 
production.
    (2) Pears that are knocked to the ground by wind or frozen and 
cannot be packed or marketed as fresh pears will be considered one 
hundred percent (100%) cull production.
    (3) Fifteen percent (15%) of all production that is considered cull 
production will be production to count.

[[Page 18299]]

    (4) No reduction in grade will be recognized for any pears that 
fail the grade standard due to uninsurable causes of loss.
    (d) This endorsement 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 endorsement is to be effective.

    Signed in Washington, D.C., on April 18, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-10145 Filed 4-24-96; 8:45 am]
BILLING CODE 3410-FA-P