Common Crop Insurance Regulations; Fresh Market Sweet Corn Crop Insurance Provisions, 42770-42775 [E6-12066]

Download as PDF 42770 Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules State and county Dates Pinellas, Hillsborough, Polk, Oseola, and Brevard Counties, Florida, and all Florida counties lying south thereof ....................... Arizona; all California counties; and all Texas counties except Bailey, Castro, Dallam, Deaf Smith, Floyd, Gaines, Hale, Hartley, Haskell, Knox, Lamb, Parmer, Swisher, and Yoakum. Alabama; Georgia; Missouri; and All Florida Counties except Pinellas, Hillsborough, Polk, Oseola, and Brevard Counties, Florida, and all Florida counties to the south thereof. Delaware; Maryland; New Jersey; North Carolina; and Virginia ...................................................................................................... Oklahoma; and Haskell and Knox Counties, Texas ........................................................................................................................ Bailey, Castro, Dallam, Deaf Smith, Floyd, Gaines, Hale, Hartley, Lamb, Parmer, Swisher, and Yoakum counties, Texas; and New Mexico. sroberts on PROD1PC70 with PROPOSALS * * * * * 12. Settlement of Claim. * * * * * (b) * * * (7) Multiplying the result of section 12(b)(6) by your share. For example: You have a 100 percent share in 100 harvested acreage acres of potatoes in the unit, with a guarantee of 150 hundredweight per acre and a price election of $4.00 per hundredweight. You are only able to harvest 10,000 hundredweight. Your indemnity would be calculated as follows: (1) 100 acres × 150 hundredweight = 15,000 hundredweight guarantee; (2) 15,000 hundredweight × $4.00 price election = $60,000.00 value of guarantee; (4) 10,000 hundredweight × $4.00 price election = $40,000.00 value of production to count; (6) $60,000.00 ¥ $40,000.00 = $20,000.00 loss; and (7) $20,000.00 × 100 percent = $20,000.00 indemnity payment. You also have a 100 percent share in 100 unharvested acres of potatoes in the same unit, with a guarantee of 150 hundredweight per acre and a price election of $3.60 per hundredweight. (The price election for unharvested acreage is 90.0 percent of your elected price election ($4.00 x 0.90 = $3.60.)) This unharvested acreage was appraised at 35 hundredweight per acre for a total of 3500 hundredweight as production to count. Your total indemnity for the harvested and unharvested acreage would be calculated as follows: (1) 100 acres × 150 hundredweight = 15,000 hundredweight guarantee for the harvested acreage, and 100 acres × 150 hundredweight = 15,000 hundredweight guarantee for the unharvested acreage; (2) 15,000 hundredweight guarantee × $4.00 price election = $60,000.00 value of guarantee for the harvested acreage, and 15,000 hundredweight guarantee × $3.60 price election = $54,000.00 value of guarantee for the unharvested acreage; (3) $60,000.00 + $54,000.00 = $114,000.00 total value of guarantee; VerDate Aug<31>2005 17:17 Jul 27, 2006 Jkt 208001 (4) 10,000 hundredweight × $4.00 price election = $40,000.00 value of production to count for the harvested acreage, and 3500 hundredweight × $3.60 = $12,600.00 value of production to count for the unharvested acreage; (5) $40,000.00 + $12,600.00 = $52,600.00 total value of production to count; (6) $114,000.00 ¥ $52,600.00 = $61,400.00 loss; and (7) $61,400.00 loss × 100 percent = $61,400.00 indemnity payment. * * * * * (e) With the exception of production with external defects, only marketable lots of mature potatoes will be production to count for loss adjustment purposes: (1) Production not meeting the standards for grading U.S. No. 2 due to external defects will be determined on an individual basis for all harvested and unharvested potatoes if we determine it is or would be practical to separate the damaged production; (2) All determinations must be based upon a grade inspection; and (3) Prior to any grade inspection, you must notify us of the intended use of the potatoes so the applicable United States Standard will be applied. (4) Marketable lots of potatoes will include any lot of potatoes that is: (i) Stored; (ii) Sold as seed; (iii) Sold for human consumption; or (iv) Harvested and not sold or that is appraised if such lots meet the standards for grading U.S. No. 2 or better on a sample basis. (5) Marketable lots will also include any potatoes that we determine: (i) Could have been sold for seed or human consumption in the general marketing area; (ii) Were not sold as a result of uninsured causes including, but not limited to, failure to meet chipper or processor standards for fry color or specific gravity; or (iii) Were disposed of without our prior written consent and such disposition prevented our determination of marketability. (6) Unless included in section 12(e)(4) or (5), a potato lot will not be PO 00000 Frm 00010 Fmt 4702 Sfmt 4702 September 30. November 30. December 31. January 31. February 28. March 15. considered marketable if, due to insurable causes of damage, it: (i) Is partially damaged, and is salvageable only for starch, alcohol, or livestock feed; (ii) Does not meet the standards for grading U.S. No. 2 or better due to internal defects; or (iii) Does not meet the standards for grading U.S. No. 2 or better due to external defects, and it is not practical to separate the damaged production. * * * * * Signed in Washington, DC, on July 21, 2006. James Callan, Acting Manager, Federal Crop Insurance Corporation. [FR Doc. 06–6527 Filed 7–27–06; 8:45 am] BILLING CODE 3410–08–P DEPARTMENT OF AGRICULTURE Federal Crop Insurance Corporation 7 CFR Part 457 RIN 0563–AC02 Common Crop Insurance Regulations; Fresh Market Sweet Corn Crop Insurance Provisions Federal Crop Insurance Corporation, USDA. ACTION: Proposed rule with request for comments. AGENCY: SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to amend its Fresh Market Sweet Corn Crop Insurance Provisions. The intended effect of this action is to provide policy changes to allow for the expansion of fresh market sweet corn coverage into areas where the crop is produced and when provided in the actuarial documents, and allow coverage for fresh market sweet corn when it is marketed through direct marketing. This change will be applicable for the 2008 and succeeding crop years. DATES: Written comments and opinions on this proposed rule will be accepted until close of business September 26, 2006 and will be considered when the E:\FR\FM\28JYP1.SGM 28JYP1 Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules rule is to be made final. Comments on information collection under the Paperwork Reduction Act of 1995 must be received on or before September 26, 2006. ADDRESSES: Interested persons are invited to submit written comments to the Director, Product Administration and Standards Division, Risk Management Agency, United States Department of Agriculture, 6501 Beacon Drive, Stop 0812, Room 421, Kansas City, MO 64133–4676. Comments titled ‘‘Fresh Market Sweet Corn Crop Insurance Provisions’’ may be sent by any of the following methods: • By Mail to: Director, Product Development Division, Risk Management Agency, United States Department of Agriculture, 6501 Beacon Drive, Stop 0812, Room 421, Kansas City, MO 64133–4676. • E-Mail: DirectorPDD@rma.usda.gov. • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the online instructions for submitting comments. A copy of each response will be available for public inspection and copying from 7 a.m. to 4:30 p.m., c.s.t., Monday through Friday, except holidays, at the above address. FOR FURTHER INFORMATION CONTACT: Linda Williams, Risk Management Specialist, Research and Development, Product Development Division, Risk Management Agency, at the Kansas City, MO, address listed above, telephone (816) 926–7730. SUPPLEMENTARY INFORMATION: Executive Order 12866 The Office of Management and Budget (OMB) has determined that this rule is not significant for the purpose of Executive Order 12866 and, therefore, it has not been reviewed by OMB. Paperwork Reduction Act of 1995 Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this proposed rule have been approved by OMB under control number 0563–0053 through November 30, 2007. sroberts on PROD1PC70 with PROPOSALS E-Government Act Compliance FCIC is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes 17:17 Jul 27, 2006 Jkt 208001 Executive Order 13132 It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among various levels or government. Regulatory Flexibility Act FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an impact on small entities, and therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605). Federal Assistance Program Unfunded Mandates Reform Act of 1995 VerDate Aug<31>2005 requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA. This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450. PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 42771 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 12988 This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule preempts State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or to require the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 and 7 CFR part 400, subpart J for the informal administrative review process of good farming practices, as applicable, must be exhausted before any action against FCIC 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 Environment Impact Statement is needed. Background FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR part 457) by revising 7 457.129 Fresh Market Sweet Corn Crop Insurance Provisions effective for the 2008 and succeeding crop years. The principal changes to the provisions for insuring fresh market sweet corn are: 1. FCIC is proposing to remove the provisions regarding document priority because these provisions are now contained in the Basic Provisions. 2. Section 1—FCIC proposes to remove definitions for the terms ‘‘excess rain,’’ ‘‘excess wind,’’ and ‘‘freeze.’’ These terms have been determined to be too limiting as causes of loss and have been replaced by the term ‘‘adverse weather conditions’’ in section 11. This will make this policy consistent with other similar policies and allow all types of adverse weather to be covered. FCIC also proposes to add a definition of ‘‘amount of insurance (per acre)’’ to specify the calculation utilized in computing the dollar amount of coverage. The term is used throughout the policy but was not previously defined. FCIC proposes to add definitions for ‘‘allowable cost,’’ E:\FR\FM\28JYP1.SGM 28JYP1 sroberts on PROD1PC70 with PROPOSALS 42772 Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules ‘‘minimum value’’ and ‘‘net value per container’’ to clarify how fresh market sweet corn will be valued for the purpose of computing production to count. Also FCIC proposes to revise the definition of ‘‘container’’ for clarity. FCIC also proposes to revise the definition of ‘‘harvest’’ to specify that it is removal of the ear from the plant and it can include either by hand or by machine. The previous definition just referred to picking of sweet corn and the new definition will clarify what is meant by picking. FCIC also proposes to revise the definition of ‘‘marketable sweet corn’’ to include the United States Standards for Grades of Sweet Corn. This will make sweet corn consistent with other crops for which the United States has standards and provide a clear objective standard upon which to determine whether the sweet corn is marketable. 3. Section 2—FCIC proposes to remove provisions which state optional units by irrigated and non-irrigated practices are not applicable. This change will allow optional units by irrigated and non-irrigated practices if the Special Provisions provide for a non-irrigated practice. This change is necessary so the fresh market sweet corn crop insurance program may be expanded into areas where the growing conditions and farming practices may not require an irrigated practice. 4. Section 3(d)—FCIC proposes to add a new section 3(d) to limit the amount of insurance per acre if a required minimum amount of production has not been produced in at least one of the three most recent crop years. This provision will provide a means to implement amount of insurance limits and prevent potential over-insurance in areas where sweet corn production may not be consistent with the reference maximum dollar amount contained in the actuarial documents. 5. Section 3(f)—FCIC proposes to add language to clarify that if sweet corn is damaged in the first stage of growth and other producers in the area would not normally care for the crop, the sweet corn will be deemed as destroyed even if the insured continues to care for the crop. There were questions regarding what occurred if the producer continued to care for the crop. This language clarifies that the crop will still be deemed destroyed, and the claim paid based on the stage the crop was in when the damaged occurred, even if the producer continues to care for the crop. 6. Section 8(c)—FCIC proposes to add an exception to the policy to allow coverage for fresh market sweet corn that is grown for direct marketing if such practice is allowed by the Special VerDate Aug<31>2005 17:17 Jul 27, 2006 Jkt 208001 Provisions or by written agreement. In many areas of the mid-west and eastern states fresh market sweet is grown and marketed directly to the public by way of farmers markets and roadside stands. This change will allow coverage for, and make the policy consistent with many other crops that are marketed by direct marketing. 7. Section 9(a)—FCIC proposes to remove paragraph (a), which previously allowed coverage for sweet corn planted in newly cleared land or former pasture land. Coverage for such acreage is normally precluded but fresh market sweet corn provided an exception because of the locations in which it was normally grown. However, as the production of the crop and coverage expand into new areas, there is concern that allowing coverage on newly cleared acreage or former pasture land will create program vulnerabilities. Therefore, FCIC is proposing to eliminate coverage for such acreage, which is consistent with most other crop policies. The following paragraphs are redesignated and restructured for clarity. 8. Section 9(b)—FCIC proposes to revise the provisions previously contained in section 9(b)(2), now redesignated as section 9(b), to specify that in areas with fall or winter planting periods, not only must the final planting date have passed, it must be considered practical to replant. If both conditions are met, the producer will have the option to replant and receive the replant payment or not replant and accept an indemnity based on the stage of growth when the damage occurred. Previously the provision only referred to the final planting date having passed and did not specify that it still must be practical to replant. This change will eliminate any ambiguity in the provision. 9. Section 10(f)—FCIC proposes to revise the provision that states that the end of the insurance period is 100 days after the date of planting or replanting. Flexibility is needed because there may be new varieties or the program may be expanded into areas where the sweet corn may take shorter or longer to mature. This change will allow FCIC to set the appropriate end of the insurance period in the Special Provisions. 10. Section 11(a)—FCIC is proposing to add ‘‘adverse weather conditions,’’ ‘‘wildlife,’’ ‘‘volcanic eruption,’’ and ‘‘earthquake’’ as insured causes of loss. This change will provide consistency in the causes of loss found in other crop insurance policies. The previous list provided the predominate causes of loss that posed a risk to the production of sweet corn in the limited areas where insurance was available. However, if PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 sweet corn gets expanded into other areas, these other causes of loss may become a risk to the crop and there is no reason that such causes should not also be covered. They pose no greater risk to sweet corn than they do to any other crop and the risks will be included in the premium rates. FCIC also proposes to remove the terms ‘‘excess rain,’’ ‘‘excess wind,’’ ‘‘freeze,’’ ‘‘hail,’’ and ‘‘tornado.’’ As stated above, the term ‘‘adverse weather conditions’’ includes the individually named causes of loss that are being removed. 11. Section 11(b)(1)—FCIC proposes to move the provisions that specify that any loss of production due to insects and disease will not be insured unless there is no effective control measures to section 11(a) and allow such causes to be covered unless damage occurs due to insufficient or improper application of pest or disease control measures. This change will standardize provisions among other crop insurance policies. 12. Section 11(b)—FCIC proposes to add a new section 11(b)(1) that would specify that failure to harvest in a timely manner is not an insured cause of loss unless harvest is prevented by one of the other insurable causes of loss. Since fresh market sweet corn is a perishable commodity, failure to timely harvest can cause damage even though no other cause of loss may have occurred. This change will ensure that only damage due to natural causes are covered. FCIC also proposes to revise section 11(b)(2) to add provisions that clarify that an indemnity will not be paid for a quarantine, boycott or refusal to accept production. This is consistent with language in other crop policies and ensures that coverage is only provided for natural causes. 13. Section 13(b)—FCIC proposes to restructure the current provisions into section 13(a) and add a new section 13(b) to require notice of loss be given at least 15 days before any production will be sold by direct marketing so an appraisal can be made. If damage occurs after this appraisal, an additional appraisal will be made. The appraisals and any acceptable production records will be used to determine production to count. Since insurance is now being provided for direct marketed crops, and there may not be any verifiable records associated with such sales, this change is necessary to more accurately determine the value of production to count. 14. Section 13(c)—FCIC proposes to add a new section 13(c) to specify that failure to give timely notice of loss when sweet corn will be sold by direct marketing will result in an amount of production to count that is not less than E:\FR\FM\28JYP1.SGM 28JYP1 sroberts on PROD1PC70 with PROPOSALS Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules the dollar amount of insurance per acre for the applicable stage if such failure results in the inability to properly determine the value of the production. Without the ability to appraise the crop before any is sold in direct marketing it will make it difficult to impossible to determine whether production was accurately reported because, unlike crops not sold through direct marketing, there are no independent sources to verify production. 15. Section 14(b)(4)(ii)—FCIC proposes to remove the provisions pertaining to the 1998 and 1999 crop years because they are obsolete and specifying the coverage level of fifty-five percent, which is the coverage level for catastrophic risk protection coverage. 16. Section 14(b)(5)—FCIC proposes to add an example of the claim for indemnity calculations at the end of paragraph (b)(5) for clarity. 17. Section 14(c)(1)(v)—FCIC is proposing to add a new section 14(c)(1)(v) that specifies that the value of production to count for direct marketed production will not be less than the dollar amount of insurance per acre for such production if the producers fails to provide timely notice that the production will be sold through direct marketing. Because of the inability to verify records of sales, approved insurance providers must have the opportunity to appraise the production before any of it is sold. This is consistent with other crops sold through direct marketing. 18. Section 14(c)(2)—FCIC is proposing to clarify that to be considered as production to count, the unharvested sweet corn must be marketable. If marketable, the value of appraised unharvested sweet corn production will not be less than the dollar amount obtained by multiplying the number of containers appraised by the minimum value per container shown in the actuarial. However, even if not marketable, the unharvested production will be considered as production to count if the production is later harvested and sold. This ensures that the producer is only indemnified for actual losses. 19. Section 14(c)(3)—FCIC is proposing to modify and clarify that the value of all harvested production that is marketable and sold (except production sold by direct marketing) and unsold. The value of sold production will be the greater of: (1) The dollar amount obtained by multiplying the total number of containers harvested by the minimum value; or (2) the dollar amount obtained by multiplying the average net value per container from all sweet corn sold by the total number of VerDate Aug<31>2005 17:17 Jul 27, 2006 Jkt 208001 containers of sweet corn sold. The value of sweet corn that is unsold but is marketable will be the dollar amount obtained by multiplying the total number of containers harvested by the minimum value. Should the actual value for each container of sold production be used and the allowable costs then subtracted it would be time consuming and complex. FCIC is proposing to use the average net value, which will allow the approved insurance provider to average the prices received and use this single price to calculate the value of all sold production, except that sold through direct marketing. This will simplify the calculation and ensure that the producer receives the proper value for the production. The provision also is intended to clarify that if the production is sold, it will be considered as production to count, regardless of whether or not it is marketable. It is only if the production is damaged or defective due to an insurable cause, not marketable and not sold will it not be included as production to count. 20. Section 14(c)(4)—FCIC is proposing to add provisions specifying the value of production that is sold by direct marketing. If all conditions are met for insurability and timely notice is given, the value will be the greater of the actual value received by the insured, or the dollar amount obtained by multiplying the total number of containers of sweet corn sold by direct market by the minimum value per container. Since it is impossible to obtain verifiable sales records, it would create a program vulnerability to allow the sales price for the direct marketed production to be used. 21. Section 16(b)(1)—FCIC is proposing to specify the value of harvested production insured under the Minimum Value Option will be the dollar amount obtained by multiplying the average net value per container from all sweet corn by the total number of containers of sweet corn sold. As stated above, should the actual value for each container of sold production be used and the allowable costs then subtracted would be time consuming and complex. FCIC is proposing to use the average net value, which will allow the approved insurance provider to average the prices received and use this single price to calculate the value of all sold production, except that sold through direct marketing. This will simplify the calculation and ensure that the producer receives the proper value for the production. 22. Section 16(b)(2)—FCIC is proposing to specify that the value of marketable production that is not sold PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 42773 will be the dollar amount obtained by the total number of containers of such sweet corn by the minimum value shown in the actuarial documents. This will ensure consistency with other policy provisions that require all sold production to be considered as production to count, regardless of whether such production is marketable. It is only if the production is damaged or defective due to an insurable cause, not marketable, and not sold will it not be included as production to count. 23. Section 16(c)—FCIC is proposing to add provisions to specify that if the Minimum Value Option is applicable, the total value of any production that is sold by direct marketing will be the greater of the actual value received by the insured or the dollar amount obtained by multiplying the total number of containers of sweet corn sold by direct market by the minimum value per container shown in the actuarial documents. As stated above, since it is impossible to obtain verifiable sales records, it would create a program vulnerability to allow the sales price for the direct marketed production to be used. List of Subjects in 7 CFR Part 457 Crop insurance, Fresh market sweet corn, Reporting and recordkeeping requirements. Proposed Rule Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 for the 2008 and succeeding crop years as follows: PART 457—COMMON CROP INSURANCE REGULATIONS 1. The authority citation for 7 CFR part 457 continues to read as follows: Authority: 7 U.S.C. 1506(1), 1506(p). 2. Amend 457.129 as follows: A. Revise the introductory text. B. Remove the paragraph regarding priority preceding section 1. C. Remove the reference of ‘‘457.8’’ from the definitions of ‘‘Crop year,’’ and ‘‘Practical to replant;’’ and from sections 3(a), 3(c), 4, 5, 6, 7, 8, 9(a), 9(b), 10, 11(a), 11(b), 12(a), 12(c), and 13. D. Add definitions in section 1 for ‘‘Allowable cost,’’ ‘‘amount of insurance (per acre),’’ ‘‘minimum value;’’ and ‘‘net value per container;’’ and remove the definitions of ‘‘excess rain,’’ ‘‘excess wind,’’ and ‘‘freeze;’’ revise the definitions of ‘‘container,’’ ‘‘harvest,’’ and ‘‘marketable sweet corn,’’ and amend the definition of ‘‘crop year’’ by removing the word ‘‘(Definitions).’’ E. Revise section 2. E:\FR\FM\28JYP1.SGM 28JYP1 42774 Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules F. Amend section 3(a) by removing the words ‘‘(Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities)’’. G. Amend section 3(c) by removing the words ‘‘(Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities)’’. H. Redesignate section 3 paragraphs (d) and (e) as paragraph (e) and (f), add a new paragraph (d), and revise newly redesignated paragraph (f). I. Amend section 4 by removing the words ‘‘(Contract Changes)’’. J. Amend section 5 by removing the words ‘‘(Life of Policy, Cancellation, and Termination)’’. K. Amend section 6 by removing the words ‘‘(Report of Acreage)’’. L. Amend section 7 by removing the words ‘‘(Annual Premium)’’. M. Amend opening paragraph of section 8 by removing the words ‘‘(Insured Crop)’’. N. Revise section 8(c)(3). O. Revise section 9. P. Amend opening paragraph in section 10 by removing the words ‘‘(Insurance Period)’’. Q. Revise section 10(f). R. Revise section 11. S. Amend sections 12(a) and (c) by removing the words ‘‘(Replanting Payment)’’. T. Revise section 13. U. Amend section 14(b)(2) by removing the words (see section 3(d)), and adding in its place ‘‘(see section 3(e)). V. In section 14, revise paragraphs (b)(4)(ii), (b)(5), (c)(1)(iii), (c)(1)(iv), (c)(2) introductory text, (c)(2)(i), and (c)(3). Add new paragraphs (c)(1)(v), (c)(4), and add an example immediately following paragraph (b)(5). W. In section 16, revise paragraph (b); redesignate current paragraph (c) as (d), and add a new paragraph (c). The revisions and additions to § 457.129 to read as follows: sroberts on PROD1PC70 with PROPOSALS § 457.129 Fresh market sweet corn crop insurance provisions. The fresh market sweet corn crop insurance provisions for the 2008 and succeeding crop years are as follows: * * * * * 1. Definitions. Allowable cost. The dollar amount per container for harvesting, packing, and handling as shown in the Special Provisions. Amount of insurance (per acre). The dollar amount of coverage per acre obtained by multiplying the reference maximum dollar amount shown on the actuarial documents by the coverage level percentage you elect. VerDate Aug<31>2005 17:17 Jul 27, 2006 Jkt 208001 Container. The unit of measurement for the insured crop as specified in the Special Provisions. * * * * * Harvest. Separation of ears of sweet corn from the plant by hand or machine. Marketable sweet corn. Sweet corn that is sold or grades U.S. No. 1 or better in accordance with the requirements of the United States Standards for Grades of Sweet Corn. Minimum Value. The dollar amount per container shown in the actuarial documents that we will use to value marketable production to count. Net value per container. The dollar value of packed and sold fresh market sweet corn obtained by subtracting the allowable cost and any additional charges specified in the Special Provisions from the gross value per container of sweet corn sold (this result may not be less than zero). * * * * * 2. Unit Division A basic unit, as defined in section 1 of the Basic Provisions, will also be established for each planting period. 3. Amounts of Insurance and Production Stages * * * * * (d) If specified in the Special Provisions, we will limit your amount of insurance per acre if you have not produced the minimum amount of production of fresh market sweet corn contained in the Special Provisions in at least one of the most recent three crop years. * * * * * (f) Any acreage of sweet corn damaged in the first 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 even though you continue to care for it. The indemnity payable for such acreage will be based on the stage the plants had achieved when the damage occurred. * * * * * 8. Insured Crop * * * * * (c) * * * (3) Grown for direct marketing, unless otherwise provided in the Special Provisions or by written agreement. 9. Insurable Acreage In addition to the provisions of section 9 of the Basic Provisions: (a) Any acreage of sweet corn damaged during the planting period in which initial planting took place must be replanted if: (1) Less than 75 percent of the plant stand remains; (2) It is practical to replant; and (3) If, at the time the crop was damaged, the final day of the planting period has not passed. PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 (b) Whenever sweet corn initially is planted during the fall or winter planting periods and the final planting date for the planting period has passed, but it is considered practical to replant, you may elect: (1) 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; or (2) 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. 10. Insurance Period * * * * * (f) 100 days after the date of planting or replanting, unless otherwise provided in the Special Provisions. 11. Causes of Loss (a) In accordance with the provisions of section 12 of the Basic Provisions, insurance is provided only against the following causes of loss that occur during the insurance period: (1) Adverse weather conditions; (2) Fire; (3) Wildlife; (4) Volcanic eruption; (5) Earthquake; (6) Insects, but not damage due to insufficient or improper application of pest control measures; (7) Plant disease, but not damage due to insufficient or improper application of disease control measures; or (8) 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 of the Basic Provisions, we will not insure against damage or loss due to: (1) Failure to harvest in a timely manner unless harvest is prevented by one of the insurable causes of loss specified in section 11(a); or (2) Failure to market the sweet corn unless such failure is due to actual physical damage caused by an insured cause of loss specified in section 11(a) that occurs during the insurance period. 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. * * * * * 13. Duties In The Event of Damage or Loss In addition to the requirements contained in section 14 of the Basic Provisions, if you intend to claim an indemnity on any unit: E:\FR\FM\28JYP1.SGM 28JYP1 sroberts on PROD1PC70 with PROPOSALS Federal Register / Vol. 71, No. 145 / Friday, July 28, 2006 / Proposed Rules (a) You also must give us notice not later than 72 hours after the earliest of: (1) The time you discontinue harvest of any acreage on the unit; (2) The date harvest normally would start if any acreage on the unit will not be harvested; or (3) The calendar date for the end of the insurance period. (b) If insurance is permitted by the Special Provisions or by written agreement on acreage with production that will be sold by direct marketing, you must notify us at least 15 days before any production from any unit will be sold by direct marketing. We will conduct an appraisal that will be used to determine the value of your production to count for production that is sold by direct marketing. If damage occurs after this appraisal, we will conduct an additional appraisal if you notify us that additional damage has occurred. These appraisals, and any acceptable production records provided by you, will be used to determine the value of your production to count. (c) Failure to give timely notice that production will be sold by direct marketing will result in an appraised amount of production to count of not less than the dollar amount of insurance (per acre) for the applicable stage if such failure results in our inability to accurately determine the value of production. 14. Settlement of Claim * * * * * (b) * * * (4) * * * (ii) For catastrophic risk protection coverage, the result of multiplying the total value of production to be counted (see section 14(c)) by fifty-five percent; and (5) Multiplying the result of section 14(b)(4) by your share. For example: You have a 100 percent share in 65.3 acres of fresh market sweet corn in the unit (15.0 acres in stage 1 and 50.3 acres in the final stage), with a dollar amount of insurance of $600 per acre. You are only able to harvest 5,627 containers of sweet corn. The net value of all sweet corn production sold ($3.11 per container) is greater than the Minimum Value per container ($2.50). The 5,627 containers sold × $3.11 average net value per container = $17,500 value of your production to count. Your indemnity would be calculated as follows: 1 15.0 acres × $600 amount of insurance = $9,000 and 50.3 acres × $600 amount of insurance = $30,180; 2 $9,000 × .65 (percent for stage 1) = $5,850 and $30,180 × 1.00 (percent for final stage) = $30,180; VerDate Aug<31>2005 17:17 Jul 27, 2006 Jkt 208001 3 $5,850 + $30,180 = $36,030 amount of insurance for the unit; 4 $36,030 ¥ $17,500 value of production to count = $18,530 loss; 5 $18,530 × 100 percent share = $18,530 indemnity payment. (c) * * * (1) * * * (iii) That is damaged solely by uninsured causes; (iv) For which you fail to provide acceptable production records; or (v) From which insurable production is sold by direct marketing and you fail to meet the requirements contained in section 13(b) of these Crop Provisions; (2) The value of appraised sweet corn production as follows, which will not be less than the dollar amount obtained by multiplying the number of containers of appraised sweet corn by the minimum value per container shown in the actuarial documents for the planting period: (i) Unharvested marketable sweet corn production (unharvested production that is damaged or defective due to insurable causes and is not marketable will not be counted as production to count unless such production is later harvested and sold); * * * * * (3) The value of all harvested production of sweet corn from the insurable acreage, except production that is sold by direct marketing as specified in section (c)(4) below: (i) For sold production, will be the greater of: (A) The dollar amount obtained by multiplying the total number of containers of sweet corn sold by the minimum value contained in the actuarial documents; or (B) The dollar amount obtained by multiplying the average net value per container from all sweet corn sold by the total number of containers of sweet corn sold. (ii) For marketable sweet corn production that is not sold, will be the dollar amount obtained by multiplying the number of containers of such sweet corn by the minimum value shown in the actuarial documents 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 to count unless such production is sold. (4) If all the requirements of insurability are met, the value of insurable production that is sold by direct marketing will be the greater of: (i) The actual value received by you for direct marketed production; or (ii) The dollar amount obtained by multiplying the total number of PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 42775 containers of sweet corn sold by direct marketing by the minimum value per container shown in the actuarial documents. * * * * * 16. Minimum Value Option * * * * * (b) In lieu of the provisions contained in section 14(c)(3) of these Crop Provisions, the total value of harvested production that is not sold by direct marketing will be determined as follows: (1) The dollar amount obtained by multiplying the average net value per container from all sweet corn sold by the total number of containers of sweet corn sold (this result may not be less than the minimum value option amount shown in the actuarial documents); (2) For marketable sweet corn production that is not sold, the value of such production will be the dollar amount obtained by multiplying the total number of containers of such sweet corn by the minimum value shown in the actuarial documents for the planting period. Harvested production that is damaged or defective due to insurable causes and is not marketable will not be included as production to count. (c) If all the requirements of insurability are met, the value of insurable production that is sold by direct marketing will be the greater of: (1) The actual value received by you for direct marketed production; or (2) The dollar amount obtained by multiplying the total number of containers of sweet corn sold by direct marketing by the minimum value per container shown in the actuarial documents. * * * * * Signed in Washington, DC, on July 21, 2006. James Callan, Acting Manager, Federal Crop Insurance Corporation. [FR Doc. E6–12066 Filed 7–27–06; 8:45 am] BILLING CODE 3410–08–P E:\FR\FM\28JYP1.SGM 28JYP1

Agencies

[Federal Register Volume 71, Number 145 (Friday, July 28, 2006)]
[Proposed Rules]
[Pages 42770-42775]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12066]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC02


Common Crop Insurance Regulations; Fresh Market Sweet Corn Crop 
Insurance Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend its Fresh Market Sweet Corn Crop Insurance Provisions. The 
intended effect of this action is to provide policy changes to allow 
for the expansion of fresh market sweet corn coverage into areas where 
the crop is produced and when provided in the actuarial documents, and 
allow coverage for fresh market sweet corn when it is marketed through 
direct marketing. This change will be applicable for the 2008 and 
succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business September 26, 2006 and will be 
considered when the

[[Page 42771]]

rule is to be made final. Comments on information collection under the 
Paperwork Reduction Act of 1995 must be received on or before September 
26, 2006.

ADDRESSES: Interested persons are invited to submit written comments to 
the Director, Product Administration and Standards Division, Risk 
Management Agency, United States Department of Agriculture, 6501 Beacon 
Drive, Stop 0812, Room 421, Kansas City, MO 64133-4676. Comments titled 
``Fresh Market Sweet Corn Crop Insurance Provisions'' may be sent by 
any of the following methods:
     By Mail to: Director, Product Development Division, Risk 
Management Agency, United States Department of Agriculture, 6501 Beacon 
Drive, Stop 0812, Room 421, Kansas City, MO 64133-4676.
     E-Mail: DirectorPDD@rma.usda.gov.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the online instructions for submitting comments. A copy of each 
response will be available for public inspection and copying from 7 
a.m. to 4:30 p.m., c.s.t., Monday through Friday, except holidays, at 
the above address.

FOR FURTHER INFORMATION CONTACT: Linda Williams, Risk Management 
Specialist, Research and Development, Product Development Division, 
Risk Management Agency, at the Kansas City, MO, address listed above, 
telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
rule is not significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 
35), the collections of information in this proposed rule have been 
approved by OMB under control number 0563-0053 through November 30, 
2007.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal governments or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among various levels or 
government.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees and compute 
premium amounts, and all producers are required to submit a notice of 
loss and production information to determine the amount of an indemnity 
payment in the event of an insured cause of crop loss. Whether a 
producer has 10 acres or 1000 acres, there is no difference in the kind 
of information collected. To ensure crop insurance is available to 
small entities, the Federal Crop Insurance Act authorizes FCIC to waive 
collection of administrative fees from limited resource farmers. FCIC 
believes this waiver helps to ensure that small entities are given the 
same opportunities as large entities to manage their risks through the 
use of crop insurance. A Regulatory Flexibility Analysis has not been 
prepared since this regulation does not have an impact on small 
entities, and therefore, this regulation is exempt from the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 605).

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 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988 on civil justice reform. The provisions of this rule will 
not have a retroactive effect. The provisions of this rule preempts 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part 11 and 7 CFR part 400, subpart J for 
the informal administrative review process of good farming practices, 
as applicable, must be exhausted before any action against FCIC 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 Environment Impact Statement 
is needed.

Background

    FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR 
part 457) by revising 7 457.129 Fresh Market Sweet Corn Crop Insurance 
Provisions effective for the 2008 and succeeding crop years. The 
principal changes to the provisions for insuring fresh market sweet 
corn are:
    1. FCIC is proposing to remove the provisions regarding document 
priority because these provisions are now contained in the Basic 
Provisions.
    2. Section 1--FCIC proposes to remove definitions for the terms 
``excess rain,'' ``excess wind,'' and ``freeze.'' These terms have been 
determined to be too limiting as causes of loss and have been replaced 
by the term ``adverse weather conditions'' in section 11. This will 
make this policy consistent with other similar policies and allow all 
types of adverse weather to be covered. FCIC also proposes to add a 
definition of ``amount of insurance (per acre)'' to specify the 
calculation utilized in computing the dollar amount of coverage. The 
term is used throughout the policy but was not previously defined. FCIC 
proposes to add definitions for ``allowable cost,''

[[Page 42772]]

``minimum value'' and ``net value per container'' to clarify how fresh 
market sweet corn will be valued for the purpose of computing 
production to count. Also FCIC proposes to revise the definition of 
``container'' for clarity. FCIC also proposes to revise the definition 
of ``harvest'' to specify that it is removal of the ear from the plant 
and it can include either by hand or by machine. The previous 
definition just referred to picking of sweet corn and the new 
definition will clarify what is meant by picking. FCIC also proposes to 
revise the definition of ``marketable sweet corn'' to include the 
United States Standards for Grades of Sweet Corn. This will make sweet 
corn consistent with other crops for which the United States has 
standards and provide a clear objective standard upon which to 
determine whether the sweet corn is marketable.
    3. Section 2--FCIC proposes to remove provisions which state 
optional units by irrigated and non-irrigated practices are not 
applicable. This change will allow optional units by irrigated and non-
irrigated practices if the Special Provisions provide for a non-
irrigated practice. This change is necessary so the fresh market sweet 
corn crop insurance program may be expanded into areas where the 
growing conditions and farming practices may not require an irrigated 
practice.
    4. Section 3(d)--FCIC proposes to add a new section 3(d) to limit 
the amount of insurance per acre if a required minimum amount of 
production has not been produced in at least one of the three most 
recent crop years. This provision will provide a means to implement 
amount of insurance limits and prevent potential over-insurance in 
areas where sweet corn production may not be consistent with the 
reference maximum dollar amount contained in the actuarial documents.
    5. Section 3(f)--FCIC proposes to add language to clarify that if 
sweet corn is damaged in the first stage of growth and other producers 
in the area would not normally care for the crop, the sweet corn will 
be deemed as destroyed even if the insured continues to care for the 
crop. There were questions regarding what occurred if the producer 
continued to care for the crop. This language clarifies that the crop 
will still be deemed destroyed, and the claim paid based on the stage 
the crop was in when the damaged occurred, even if the producer 
continues to care for the crop.
    6. Section 8(c)--FCIC proposes to add an exception to the policy to 
allow coverage for fresh market sweet corn that is grown for direct 
marketing if such practice is allowed by the Special Provisions or by 
written agreement. In many areas of the mid-west and eastern states 
fresh market sweet is grown and marketed directly to the public by way 
of farmers markets and roadside stands. This change will allow coverage 
for, and make the policy consistent with many other crops that are 
marketed by direct marketing.
    7. Section 9(a)--FCIC proposes to remove paragraph (a), which 
previously allowed coverage for sweet corn planted in newly cleared 
land or former pasture land. Coverage for such acreage is normally 
precluded but fresh market sweet corn provided an exception because of 
the locations in which it was normally grown. However, as the 
production of the crop and coverage expand into new areas, there is 
concern that allowing coverage on newly cleared acreage or former 
pasture land will create program vulnerabilities. Therefore, FCIC is 
proposing to eliminate coverage for such acreage, which is consistent 
with most other crop policies. The following paragraphs are 
redesignated and restructured for clarity.
    8. Section 9(b)--FCIC proposes to revise the provisions previously 
contained in section 9(b)(2), now redesignated as section 9(b), to 
specify that in areas with fall or winter planting periods, not only 
must the final planting date have passed, it must be considered 
practical to replant. If both conditions are met, the producer will 
have the option to replant and receive the replant payment or not 
replant and accept an indemnity based on the stage of growth when the 
damage occurred. Previously the provision only referred to the final 
planting date having passed and did not specify that it still must be 
practical to replant. This change will eliminate any ambiguity in the 
provision.
    9. Section 10(f)--FCIC proposes to revise the provision that states 
that the end of the insurance period is 100 days after the date of 
planting or replanting. Flexibility is needed because there may be new 
varieties or the program may be expanded into areas where the sweet 
corn may take shorter or longer to mature. This change will allow FCIC 
to set the appropriate end of the insurance period in the Special 
Provisions.
    10. Section 11(a)--FCIC is proposing to add ``adverse weather 
conditions,'' ``wildlife,'' ``volcanic eruption,'' and ``earthquake'' 
as insured causes of loss. This change will provide consistency in the 
causes of loss found in other crop insurance policies. The previous 
list provided the predominate causes of loss that posed a risk to the 
production of sweet corn in the limited areas where insurance was 
available. However, if sweet corn gets expanded into other areas, these 
other causes of loss may become a risk to the crop and there is no 
reason that such causes should not also be covered. They pose no 
greater risk to sweet corn than they do to any other crop and the risks 
will be included in the premium rates. FCIC also proposes to remove the 
terms ``excess rain,'' ``excess wind,'' ``freeze,'' ``hail,'' and 
``tornado.'' As stated above, the term ``adverse weather conditions'' 
includes the individually named causes of loss that are being removed.
    11. Section 11(b)(1)--FCIC proposes to move the provisions that 
specify that any loss of production due to insects and disease will not 
be insured unless there is no effective control measures to section 
11(a) and allow such causes to be covered unless damage occurs due to 
insufficient or improper application of pest or disease control 
measures. This change will standardize provisions among other crop 
insurance policies.
    12. Section 11(b)--FCIC proposes to add a new section 11(b)(1) that 
would specify that failure to harvest in a timely manner is not an 
insured cause of loss unless harvest is prevented by one of the other 
insurable causes of loss. Since fresh market sweet corn is a perishable 
commodity, failure to timely harvest can cause damage even though no 
other cause of loss may have occurred. This change will ensure that 
only damage due to natural causes are covered. FCIC also proposes to 
revise section 11(b)(2) to add provisions that clarify that an 
indemnity will not be paid for a quarantine, boycott or refusal to 
accept production. This is consistent with language in other crop 
policies and ensures that coverage is only provided for natural causes.
    13. Section 13(b)--FCIC proposes to restructure the current 
provisions into section 13(a) and add a new section 13(b) to require 
notice of loss be given at least 15 days before any production will be 
sold by direct marketing so an appraisal can be made. If damage occurs 
after this appraisal, an additional appraisal will be made. The 
appraisals and any acceptable production records will be used to 
determine production to count. Since insurance is now being provided 
for direct marketed crops, and there may not be any verifiable records 
associated with such sales, this change is necessary to more accurately 
determine the value of production to count.
    14. Section 13(c)--FCIC proposes to add a new section 13(c) to 
specify that failure to give timely notice of loss when sweet corn will 
be sold by direct marketing will result in an amount of production to 
count that is not less than

[[Page 42773]]

the dollar amount of insurance per acre for the applicable stage if 
such failure results in the inability to properly determine the value 
of the production. Without the ability to appraise the crop before any 
is sold in direct marketing it will make it difficult to impossible to 
determine whether production was accurately reported because, unlike 
crops not sold through direct marketing, there are no independent 
sources to verify production.
    15. Section 14(b)(4)(ii)--FCIC proposes to remove the provisions 
pertaining to the 1998 and 1999 crop years because they are obsolete 
and specifying the coverage level of fifty-five percent, which is the 
coverage level for catastrophic risk protection coverage.
    16. Section 14(b)(5)--FCIC proposes to add an example of the claim 
for indemnity calculations at the end of paragraph (b)(5) for clarity.
    17. Section 14(c)(1)(v)--FCIC is proposing to add a new section 
14(c)(1)(v) that specifies that the value of production to count for 
direct marketed production will not be less than the dollar amount of 
insurance per acre for such production if the producers fails to 
provide timely notice that the production will be sold through direct 
marketing. Because of the inability to verify records of sales, 
approved insurance providers must have the opportunity to appraise the 
production before any of it is sold. This is consistent with other 
crops sold through direct marketing.
    18. Section 14(c)(2)--FCIC is proposing to clarify that to be 
considered as production to count, the unharvested sweet corn must be 
marketable. If marketable, the value of appraised unharvested sweet 
corn production will not be less than the dollar amount obtained by 
multiplying the number of containers appraised by the minimum value per 
container shown in the actuarial. However, even if not marketable, the 
unharvested production will be considered as production to count if the 
production is later harvested and sold. This ensures that the producer 
is only indemnified for actual losses.
    19. Section 14(c)(3)--FCIC is proposing to modify and clarify that 
the value of all harvested production that is marketable and sold 
(except production sold by direct marketing) and unsold. The value of 
sold production will be the greater of: (1) The dollar amount obtained 
by multiplying the total number of containers harvested by the minimum 
value; or (2) the dollar amount obtained by multiplying the average net 
value per container from all sweet corn sold by the total number of 
containers of sweet corn sold. The value of sweet corn that is unsold 
but is marketable will be the dollar amount obtained by multiplying the 
total number of containers harvested by the minimum value. Should the 
actual value for each container of sold production be used and the 
allowable costs then subtracted it would be time consuming and complex. 
FCIC is proposing to use the average net value, which will allow the 
approved insurance provider to average the prices received and use this 
single price to calculate the value of all sold production, except that 
sold through direct marketing. This will simplify the calculation and 
ensure that the producer receives the proper value for the production. 
The provision also is intended to clarify that if the production is 
sold, it will be considered as production to count, regardless of 
whether or not it is marketable. It is only if the production is 
damaged or defective due to an insurable cause, not marketable and not 
sold will it not be included as production to count.
    20. Section 14(c)(4)--FCIC is proposing to add provisions 
specifying the value of production that is sold by direct marketing. If 
all conditions are met for insurability and timely notice is given, the 
value will be the greater of the actual value received by the insured, 
or the dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by direct market by the minimum value per 
container. Since it is impossible to obtain verifiable sales records, 
it would create a program vulnerability to allow the sales price for 
the direct marketed production to be used.
    21. Section 16(b)(1)--FCIC is proposing to specify the value of 
harvested production insured under the Minimum Value Option will be the 
dollar amount obtained by multiplying the average net value per 
container from all sweet corn by the total number of containers of 
sweet corn sold. As stated above, should the actual value for each 
container of sold production be used and the allowable costs then 
subtracted would be time consuming and complex. FCIC is proposing to 
use the average net value, which will allow the approved insurance 
provider to average the prices received and use this single price to 
calculate the value of all sold production, except that sold through 
direct marketing. This will simplify the calculation and ensure that 
the producer receives the proper value for the production.
    22. Section 16(b)(2)--FCIC is proposing to specify that the value 
of marketable production that is not sold will be the dollar amount 
obtained by the total number of containers of such sweet corn by the 
minimum value shown in the actuarial documents. This will ensure 
consistency with other policy provisions that require all sold 
production to be considered as production to count, regardless of 
whether such production is marketable. It is only if the production is 
damaged or defective due to an insurable cause, not marketable, and not 
sold will it not be included as production to count.
    23. Section 16(c)--FCIC is proposing to add provisions to specify 
that if the Minimum Value Option is applicable, the total value of any 
production that is sold by direct marketing will be the greater of the 
actual value received by the insured or the dollar amount obtained by 
multiplying the total number of containers of sweet corn sold by direct 
market by the minimum value per container shown in the actuarial 
documents. As stated above, since it is impossible to obtain verifiable 
sales records, it would create a program vulnerability to allow the 
sales price for the direct marketed production to be used.

List of Subjects in 7 CFR Part 457

    Crop insurance, Fresh market sweet corn, Reporting and 
recordkeeping requirements.

Proposed Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 457 for the 2008 and 
succeeding crop years as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

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

    Authority: 7 U.S.C. 1506(1), 1506(p).

    2. Amend 457.129 as follows:
    A. Revise the introductory text.
    B. Remove the paragraph regarding priority preceding section 1.
    C. Remove the reference of ``457.8'' from the definitions of ``Crop 
year,'' and ``Practical to replant;'' and from sections 3(a), 3(c), 4, 
5, 6, 7, 8, 9(a), 9(b), 10, 11(a), 11(b), 12(a), 12(c), and 13.
    D. Add definitions in section 1 for ``Allowable cost,'' ``amount of 
insurance (per acre),'' ``minimum value;'' and ``net value per 
container;'' and remove the definitions of ``excess rain,'' ``excess 
wind,'' and ``freeze;'' revise the definitions of ``container,'' 
``harvest,'' and ``marketable sweet corn,'' and amend the definition of 
``crop year'' by removing the word ``(Definitions).''
    E. Revise section 2.

[[Page 42774]]

    F. Amend section 3(a) by removing the words ``(Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities)''.
    G. Amend section 3(c) by removing the words ``(Insurance 
Guarantees, Coverage Levels, and Prices for Determining Indemnities)''.
    H. Redesignate section 3 paragraphs (d) and (e) as paragraph (e) 
and (f), add a new paragraph (d), and revise newly redesignated 
paragraph (f).
    I. Amend section 4 by removing the words ``(Contract Changes)''.
    J. Amend section 5 by removing the words ``(Life of Policy, 
Cancellation, and Termination)''.
    K. Amend section 6 by removing the words ``(Report of Acreage)''.
    L. Amend section 7 by removing the words ``(Annual Premium)''.
    M. Amend opening paragraph of section 8 by removing the words 
``(Insured Crop)''.
    N. Revise section 8(c)(3).
    O. Revise section 9.
    P. Amend opening paragraph in section 10 by removing the words 
``(Insurance Period)''.
    Q. Revise section 10(f).
    R. Revise section 11.
    S. Amend sections 12(a) and (c) by removing the words ``(Replanting 
Payment)''.
    T. Revise section 13.
    U. Amend section 14(b)(2) by removing the words (see section 3(d)), 
and adding in its place ``(see section 3(e)).
    V. In section 14, revise paragraphs (b)(4)(ii), (b)(5), 
(c)(1)(iii), (c)(1)(iv), (c)(2) introductory text, (c)(2)(i), and 
(c)(3). Add new paragraphs (c)(1)(v), (c)(4), and add an example 
immediately following paragraph (b)(5).
    W. In section 16, revise paragraph (b); redesignate current 
paragraph (c) as (d), and add a new paragraph (c).
    The revisions and additions to Sec.  457.129 to read as follows:


Sec.  457.129  Fresh market sweet corn crop insurance provisions.

    The fresh market sweet corn crop insurance provisions for the 2008 
and succeeding crop years are as follows:
* * * * *
    1. Definitions.
    Allowable cost. The dollar amount per container for harvesting, 
packing, and handling as shown in the Special Provisions.
    Amount of insurance (per acre). The dollar amount of coverage per 
acre obtained by multiplying the reference maximum dollar amount shown 
on the actuarial documents by the coverage level percentage you elect.
    Container. The unit of measurement for the insured crop as 
specified in the Special Provisions.
* * * * *
    Harvest. Separation of ears of sweet corn from the plant by hand or 
machine.
    Marketable sweet corn. Sweet corn that is sold or grades U.S. No. 1 
or better in accordance with the requirements of the United States 
Standards for Grades of Sweet Corn.
    Minimum Value. The dollar amount per container shown in the 
actuarial documents that we will use to value marketable production to 
count.
    Net value per container. The dollar value of packed and sold fresh 
market sweet corn obtained by subtracting the allowable cost and any 
additional charges specified in the Special Provisions from the gross 
value per container of sweet corn sold (this result may not be less 
than zero).
* * * * *
    2. Unit Division
    A basic unit, as defined in section 1 of the Basic Provisions, will 
also be established for each planting period.
    3. Amounts of Insurance and Production Stages
* * * * *
    (d) If specified in the Special Provisions, we will limit your 
amount of insurance per acre if you have not produced the minimum 
amount of production of fresh market sweet corn contained in the 
Special Provisions in at least one of the most recent three crop years.
* * * * *
    (f) Any acreage of sweet corn damaged in the first 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 even though 
you continue to care for it. The indemnity payable for such acreage 
will be based on the stage the plants had achieved when the damage 
occurred.
* * * * *
    8. Insured Crop
* * * * *
    (c) * * *
    (3) Grown for direct marketing, unless otherwise provided in the 
Special Provisions or by written agreement.
    9. Insurable Acreage
    In addition to the provisions of section 9 of the Basic Provisions:
    (a) Any acreage of sweet corn damaged during the planting period in 
which initial planting took place must be replanted if:
    (1) Less than 75 percent of the plant stand remains;
    (2) It is practical to replant; and
    (3) If, at the time the crop was damaged, the final day of the 
planting period has not passed.
    (b) Whenever sweet corn initially is planted during the fall or 
winter planting periods and the final planting date for the planting 
period has passed, but it is considered practical to replant, you may 
elect:
    (1) 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; or
    (2) 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.
    10. Insurance Period
* * * * *
    (f) 100 days after the date of planting or replanting, unless 
otherwise provided in the Special Provisions.
    11. Causes of Loss
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Wildlife;
    (4) Volcanic eruption;
    (5) Earthquake;
    (6) Insects, but not damage due to insufficient or improper 
application of pest control measures;
    (7) Plant disease, but not damage due to insufficient or improper 
application of disease control measures; or
    (8) 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 of the 
Basic Provisions, we will not insure against damage or loss due to:
    (1) Failure to harvest in a timely manner unless harvest is 
prevented by one of the insurable causes of loss specified in section 
11(a); or
    (2) Failure to market the sweet corn unless such failure is due to 
actual physical damage caused by an insured cause of loss specified in 
section 11(a) that occurs during the insurance period. 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.
* * * * *
    13. Duties In The Event of Damage or Loss
    In addition to the requirements contained in section 14 of the 
Basic Provisions, if you intend to claim an indemnity on any unit:

[[Page 42775]]

    (a) You also must give us notice not later than 72 hours after the 
earliest of:
    (1) The time you discontinue harvest of any acreage on the unit;
    (2) The date harvest normally would start if any acreage on the 
unit will not be harvested; or
    (3) The calendar date for the end of the insurance period.
    (b) If insurance is permitted by the Special Provisions or by 
written agreement on acreage with production that will be sold by 
direct marketing, you must notify us at least 15 days before any 
production from any unit will be sold by direct marketing. We will 
conduct an appraisal that will be used to determine the value of your 
production to count for production that is sold by direct marketing. If 
damage occurs after this appraisal, we will conduct an additional 
appraisal if you notify us that additional damage has occurred. These 
appraisals, and any acceptable production records provided by you, will 
be used to determine the value of your production to count.
    (c) Failure to give timely notice that production will be sold by 
direct marketing will result in an appraised amount of production to 
count of not less than the dollar amount of insurance (per acre) for 
the applicable stage if such failure results in our inability to 
accurately determine the value of production.
    14. Settlement of Claim
* * * * *
    (b) * * *
    (4) * * *
    (ii) For catastrophic risk protection coverage, the result of 
multiplying the total value of production to be counted (see section 
14(c)) by fifty-five percent; and
    (5) Multiplying the result of section 14(b)(4) by your share.
    For example:
    You have a 100 percent share in 65.3 acres of fresh market sweet 
corn in the unit (15.0 acres in stage 1 and 50.3 acres in the final 
stage), with a dollar amount of insurance of $600 per acre. You are 
only able to harvest 5,627 containers of sweet corn. The net value of 
all sweet corn production sold ($3.11 per container) is greater than 
the Minimum Value per container ($2.50). The 5,627 containers sold x 
$3.11 average net value per container = $17,500 value of your 
production to count. Your indemnity would be calculated as follows:

1 15.0 acres x $600 amount of insurance = $9,000 and 50.3 acres x $600 
amount of insurance = $30,180;
2 $9,000 x .65 (percent for stage 1) = $5,850 and $30,180 x 1.00 
(percent for final stage) = $30,180;
3 $5,850 + $30,180 = $36,030 amount of insurance for the unit;
4 $36,030 - $17,500 value of production to count = $18,530 loss;
5 $18,530 x 100 percent share = $18,530 indemnity payment.
    (c) * * *
    (1) * * *
    (iii) That is damaged solely by uninsured causes;
    (iv) For which you fail to provide acceptable production records; 
or
    (v) From which insurable production is sold by direct marketing and 
you fail to meet the requirements contained in section 13(b) of these 
Crop Provisions;
    (2) The value of appraised sweet corn production as follows, which 
will not be less than the dollar amount obtained by multiplying the 
number of containers of appraised sweet corn by the minimum value per 
container shown in the actuarial documents for the planting period:
    (i) Unharvested marketable sweet corn production (unharvested 
production that is damaged or defective due to insurable causes and is 
not marketable will not be counted as production to count unless such 
production is later harvested and sold);
* * * * *
    (3) The value of all harvested production of sweet corn from the 
insurable acreage, except production that is sold by direct marketing 
as specified in section (c)(4) below:
    (i) For sold production, will be the greater of:
    (A) The dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by the minimum value contained in the 
actuarial documents; or
    (B) The dollar amount obtained by multiplying the average net value 
per container from all sweet corn sold by the total number of 
containers of sweet corn sold.
    (ii) For marketable sweet corn production that is not sold, will be 
the dollar amount obtained by multiplying the number of containers of 
such sweet corn by the minimum value shown in the actuarial documents 
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 to count unless such production is sold.
    (4) If all the requirements of insurability are met, the value of 
insurable production that is sold by direct marketing will be the 
greater of:
    (i) The actual value received by you for direct marketed 
production; or
    (ii) The dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by direct marketing by the minimum value 
per container shown in the actuarial documents.
* * * * *
    16. Minimum Value Option
* * * * *
    (b) In lieu of the provisions contained in section 14(c)(3) of 
these Crop Provisions, the total value of harvested production that is 
not sold by direct marketing will be determined as follows:
    (1) The dollar amount obtained by multiplying the average net value 
per container from all sweet corn sold by the total number of 
containers of sweet corn sold (this result may not be less than the 
minimum value option amount shown in the actuarial documents);
    (2) For marketable sweet corn production that is not sold, the 
value of such production will be the dollar amount obtained by 
multiplying the total number of containers of such sweet corn by the 
minimum value shown in the actuarial documents for the planting period. 
Harvested production that is damaged or defective due to insurable 
causes and is not marketable will not be included as production to 
count.
    (c) If all the requirements of insurability are met, the value of 
insurable production that is sold by direct marketing will be the 
greater of:
    (1) The actual value received by you for direct marketed 
production; or
    (2) The dollar amount obtained by multiplying the total number of 
containers of sweet corn sold by direct marketing by the minimum value 
per container shown in the actuarial documents.
* * * * *

    Signed in Washington, DC, on July 21, 2006.
James Callan,
Acting Manager, Federal Crop Insurance Corporation.
 [FR Doc. E6-12066 Filed 7-27-06; 8:45 am]
BILLING CODE 3410-08-P