Source: https://www.federalregister.gov/documents/2002/07/12/02-16680/common-crop-insurance-regulations-sugarcane-crop-insurance-provisions
Timestamp: 2017-08-18 07:33:29
Document Index: 539998035

Matched Legal Cases: ['§\u2009457', '§\u2009457', '§\u2009457', '§\u2009457', '§\u2009457', '§\u2009457', '§\u2009457']

A Rule by the Federal Crop Insurance Corporation on 07/12/2002
46093-46096 (4 pages)
https://www.federalregister.gov/d/02-16680 https://www.federalregister.gov/d/02-16680
The Federal Crop Insurance Corporation (FCIC) finalizes crop provisions for the insurance of sugarcane. The intended effect of this action is to provide policy changes to better meet the needs of the insured. The changes will apply for the 2003 and subsequent crop years.
Arden Routh, Risk Management Specialist, Product Development Division, Federal Crop Insurance Corporation, United States Department of Agriculture, 6501 Beacon Drive, Kansas City, MO 64133, telephone (816) 926-7730.
Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control number 0563-0053 through April 30, 2004.
On October 18, 2000, FCIC published a notice of proposed rulemaking in the Federal Register at 65 FR 62311-62313 to revise 7 CFR 457.116 Sugarcane Crop Insurance Provisions, effective for the 2002 and succeeding crop years.
Following publication of the proposed rule the public was afforded 60 days to submit written comments and opinions. A total of 18 comments were received from two reinsured companies and a trade association. The comments received and FCIC's responses are as follows:
Comment. A comment from a trade association stated that the language in section 5(b)(1) is not clear as to which year's production guarantee will be used to determine if the sugarcane is damaged to the extent that it is uninsurable. The commenter also asked who will make the determination that such sugarcane will not produce the production guarantee. The commenter recommended clarifying this section by stating that we will not insure a field of sugarcane that did not produce the production guarantee the previous year.
Response. FCIC disagrees with the commenter's recommended change to section 5(b)(1). Adoption would render the sugarcane uninsurable any time an indemnity is paid the previous year even if the sugarcane has recovered. However, FCIC has clarified that Start Printed Page 46094sugarcane damaged the previous crop year will not be insurable for the current crop year if the sugarcane is unable to produce the yield used to establish the production guarantee for the unit. This clarification is consistent with other crop policies. Company loss adjusters must inspect damaged sugarcane prior to the dates listed in section 7(a)(3) or (4), to determine if such sugarcane is insurable.
Comment. A trade association and an approved insurance provider questioned what age limitations (number of years) will be applicable in section 5(b)(2)?
Response. The age limitation by sugarcane variety, if applicable, will be listed in the Sugarcane Special Provisions. A general example of such a statement would be “Sugarcane variety LCP 85-384 will not be insurable the sixth year after the initial planting of the sugarcane.”
Comment. An approved insurance provider objected to adding an age limitation on insurable sugarcane in section 5(b)(2). The commenter said the age is not the key variable in the yield but rather care and cultural practices determine yields.
Response. Research shows that sugarcane production decreases with the age of a sugarcane stand and at some point the sugarcane will be unable to produce the yield used to establish the production guarantee. It would violate the principals of insurance to insure a crop that has no expectations of producing the production guarantee. Therefore, no change has been made.
Comment. A trade association recommended that approved insurance providers be given the ability to review the age limitations that will be contained in the Special Provisions prior to issuance of the Special Provisions. This would allow them the opportunity to suggest any changes to these provisions.
Response. The Risk Management Agency Regional Offices will work with all appropriate parties to obtain the information to determine the appropriate age limitations. Any comments will be considered during the process.
Comment. A trade association and an approved insurance provider recommended that FCIC list in the Sugarcane Loss Adjustment Standards Handbook the new and old varieties of sugarcane currently being grown. The commenters also stated that current producers are obtaining good yields on some varieties of sugarcane for up to six years and nearly all varieties for up to four years.
Response. The list of insurable sugarcane must also be available to producers. Therefore, the Sugarcane Special Provisions, which are issued annually, will contain a list of insurable sugarcane varieties and their age limitations. FCIC will examine the yields of the varieties of sugarcane when setting the age limitations.
Comment. A trade association and an approved insurance provider commented about the language in section 5(b)(2) as some producers may have sugarcane that exceeds the age limitation for insurance but the producers prefer to continue to keep such sugarcane under production. In addition, the commenters asked if a producer must request coverage by written agreement to continue to insure such sugarcane.
Response. Coverage for sugarcane that has exceeded the age limitation may be provided if the producer requests that such sugarcane be insured and the insurance provider agrees in writing to insure such acreage. Agreements in writing must not be provided unless the producer can show that the crop has the expectation of producing at least the yield used to establish the production guarantee.
Comment. A trade association stated that although limiting the age at which sugarcane can be insured may eliminate the need for performing stand appraisals, there will still be the need for some type of appraisal if the producer requests insurance of such sugarcane by written agreement.
Response. FCIC agrees there is a need for an appraisal method to determine the insurability of sugarcane that has exceeded the age limitation. The appraisal method will be described in the Sugarcane Loss Adjustment Standards Handbook, which is posted on FCIC's website at: www.rma.usda.gov.
Comment. A trade association asked if the dates in sections 7(a)(3) and (4) are needed if insurance coverage is not allowed on sugarcane that was damaged the previous year. Also, if a written agreement is allowed, language should be provided to state that a field inspection is or is not required.
Response. Sugarcane damaged the previous year may be insurable if it is able to produce the yield used to establish the production guarantee for the current crop year. The dates specified in sections 7(a)(3) and (4) are the dates when insurance will attach to such sugarcane. Language has been added to section 5(b)(2) to specify that an appraisal is needed to determine whether the sugarcane is able to produce the yield used to establish the production guarantee for the current crop year.
Comment. A trade association asked if the proposed language in section 7(b)(2) means that a subsequent year's coverage for a sugarcane crop in all other states except Louisiana could begin prior to the end of the previous year's insurance period of April 30.
Response. FCIC has revised section 7(b)(2) to specify the later of April 15, or 30 days following harvest of the previous crop for stubble cane. This will allow time for an appraisal before insurance attaches.
Comment. A trade association recommended clarifying the language in section 9(a)(2) to state that sugarcane cut for seed without an appraisal will be considered as destroyed without consent and not less than the production guarantee will be considered as production to count. The commenter also requested clarification as to what production will be used to update the actual production history database for the following year for such acreage.
Response. FCIC agrees that not more than the production guarantee should be assigned as production to count and has revised the provision accordingly. This is consistent with section 10(c)(1)(i)(B). For actual production history purposes, the number of acres of sugarcane destroyed without consent will be counted in the total acreage for the unit, but the production to count for such acreage will be zero.
Comment. Two comments were received, one from a trade association and one from an approved insurance provider regarding section 9(a)(2) that a producer knows which acreage is going to be planted or replanted, but may not know which acreage will be cut for seed.
Response. Producers should certainly know before they harvest the crop, which acres are going to be harvested for seed. The 15 day requirement is needed to allow the approved insurance provider time to appraise the acreage. Therefore, no change has been made.
Comment. A trade association commented on the addition of language in section 9(a)(2) that requires an appraisal of sugarcane that will be cut for seed, even though there may not be a loss on the sugarcane. This will result in additional expense to the companies.
Response. The current Sugarcane Crop Provisions in section 9(a)(2) requires the producer to give at least 15 days notice prior to cutting sugarcane for seed and after such notice the sugarcane will be appraised for its sugar potential. Section 9(a)(3), requires a producer to request an appraisal if any time during the crop year sugarcane acreage cut for seed will not produce at least the production guarantee. If an Start Printed Page 46095appraisal is not requested the production to count for such acreage will be the production guarantee. No additional expenses will be incurred by approved insurance providers, because this is currently a requirement in the policy. Therefore, no change has been made.
Comment. A trade association recommended for consistency that the same production guarantee be used in the settlement of claim examples in section 10.
Response. FCIC agrees with the comment and has clarified the settlement of claim examples by using the term production guarantee, where applicable, and the same number of pounds for the production guarantee.
1. Added language in section 7(a)(1) to clarify when insurance attaches for plant cane.
2. Clarified that the language in section 9(a)(3) refers to sugarcane cut for seed.
3. Replaced the term “approved yield” with “production guarantee” in section 9(a)(2) to be consistent with section 10(c)(1)(i)(B) of the current Sugarcane Crop Provisions and also in section 9(a)(3) to be consistent with section 10(c)(1)(iv) of this final rule.
Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation amends the Common Crop Insurance Regulations (
2. Amend 457.116 as follows:
b. In the crop insurance provisions:
i. In Section 1, revise the definition of “sugarcane”;
ii. Revise sections 3, 5, 6, and 7;
iii. Revise section 9(a) introductory text and 9(a)(2), and add section 9(a)(3);
iv. Add 2 examples following section 10(b)(4);
v. Remove section 10(c)(1)(iv);
vi. Redesignate sections 10(c)(1)(v) and (c)(1)(vi) as sections 10(c)(1)(iv) and (c)(1)(v), respectively; and
vii. Revise newly designated sections 10(c)(1)(iv) and (c)(1)(v) introductory text.
The Sugarcane Crop Insurance Provisions for the 2003 and succeeding crop years are as follows:
In accordance with section 4 of the Basic Provisions (§ 457.8), the contract change date is June 30 preceding the cancellation date.
(a) In accordance with section 8 of the Basic Provisions (§ 457.8), the crop insured will be all the sugarcane in the county for which a premium rate is provided by the actuarial documents:
(b) In addition to the crop listed as not insured in section 8(b) of the Basic Provisions (§ 457.8), we will not insure any sugarcane:
(1) That was damaged the previous crop year to the extent the sugarcane is unable to produce the yield used to establish the production guarantee for the unit for the current crop year; or
(2) That exceeds the age limitations (by variety, if applicable) contained in the Special Provisions , unless we agree in writing to insure such acreage. An agreement in writing will not be provided unless, after an appraisal, we determine that the crop is able to produce at least the yield used to establish the production guarantee for the unit for the current crop year.
Section 9(a)(3) of the Basic Provisions (§ 457.8), is not applicable to the Sugarcane Crop Insurance Provisions.
(a) In addition to the provisions of section 11 of the Basic Provisions (§ 457.8), insurance attaches:
(1) On the later of the day we accept your application or at the time of planting for plant cane;
(3) On the later of April 15 or 30 days following harvest of the previous crop for stubble cane damaged during the previous crop year in all states (except Louisiana); and
(4) On the later of April 30 or 30 days following harvest of the previous crop for stubble cane damaged during the previous crop year in Louisiana.
(b) In accordance with the provisions of section 11 of the Basic Provisions (§ 457.8), the calendar date for the end of the insurance period is:
(a) In addition to your duties under section 14 of the Basic Provisions (§ 457.8), in the event of damage or loss:
(2) You must give us notice at least 15 days before you begin cutting any sugarcane for seed. Your notice must include the unit number and the number of acres you intend to harvest as seed. Failure to give us timely notice will cause the acreage cut for seed to be considered as put to another use without consent. The production to count for such acreage will not be less than the production guarantee.
(3) You must request an appraisal if any time during the crop year sugarcane acreage cut for seed will not produce at least the production guarantee so we can determine the production to count. If you do not request an appraisal, the production to count for such acreage will be the production guarantee.
(1) 100 acres × 3,900 pound production guarantee = 390,000 pound production guarantee;
(2) 390,000 pound production guarantee−200,000 pounds harvested production = 190,000 pound production loss;
(3) 190,000 pound production loss × $0.12 price election = $22,800 loss; and
(4) $22,800 loss × 100 percent share = $22,800 indemnity payment.
(2) 390,000 pound production guarantee−278,000 (200,000 pounds harvested production + 78,000 pounds production for putting acreage to another use without consent, (20 acres × 3,900 pound production guarantee per acre)) = 112,000 pound production loss; Start Printed Page 46096
(3) 112,000 pound production loss × $0.12 price election = $13,440 loss; and
(4) $13,440 loss × 100 percent share = $13,440 indemnity payment.
(iv) Potential production on insured acreage harvested for seed (see section 9(a)(3));
(v) Potential production on insured acreage you want to put to another use or you wish to abandon and 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 put the acreage to another use or abandon the crop. If agreement on the appraised amount of production is not reached:
[FR Doc. 02-16680 Filed 7-11-02; 8:45 am]