Common Crop Insurance Regulations; Mustard Crop Insurance Provisions, 11318-11323 [E8-3963]
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Federal Register / Vol. 73, No. 42 / Monday, March 3, 2008 / Rules and Regulations
(d) Mature green weight will be
multiplied by the recovery percentage
subject to the following:
(1) We may obtain samples of the
production to determine the recovery
percentage.
(2) The determined recovery
percentage will be used to calculate
your loss only if:
(i) All determined recovery
percentages are established using
samples of green weight production
obtained by us or by the processor for
sold or processed production; and
(ii) The samples are analyzed by an
approved laboratory.
(3) If the conditions of section 11(d)(2)
are not met, the standard recovery
percentage will be used.
12. Late Planting
The provisions of section 16 of the
Basic Provisions are not applicable.
13. Prevented Planting
The provisions of section 17 of the
Basic Provisions are not applicable.
Signed in Washington, DC on February 21,
2008.
Eldon Gould,
Manager, Federal Crop Insurance
Corporation.
[FR Doc. E8–3964 Filed 2–29–08; 8:45 am]
BILLING CODE 3410–08–P
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563–AC04
Common Crop Insurance Regulations;
Mustard Crop Insurance Provisions
Federal Crop Insurance
Corporation, USDA.
ACTION: Final rule.
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AGENCY:
SUMMARY: The Federal Crop Insurance
Corporation (FCIC) finalizes the
Common Crop Insurance Regulations;
Mustard Crop Insurance Provisions to
convert the mustard pilot crop
insurance program to a permanent
insurance program for the 2009 and
succeeding crop years.
DATES: Effective Date: April 2, 2008.
FOR FURTHER INFORMATION CONTACT: Gary
Johnson, Risk Management Specialist,
USDA Risk Management Agency-PASD,
Beacon Facility-Mail Stop 0812, P.O.
Box 419205, Kansas City, MO 64141–
6205, telephone (816) 926–7730.
SUPPLEMENTARY INFORMATION:
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Executive Order 12866
The Office of Management and Budget
(OMB) has determined that this rule is
non-significant for the purposes of
Executive Order 12866 and, therefore, it
has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the provisions of 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 June 30,
2008.
E-Government Act Compliance
FCIC is committed to complying with
the E-Government Act of 2002, 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 the various
levels of 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
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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 will preempt 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 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 economic impact on the
quality of the human environment,
health, or safety. Therefore, neither an
Environmental Assessment nor an
Environmental Impact Statement is
needed.
Background:
On Thursday, November 16, 2006,
FCIC published a notice of proposed
rulemaking in the Federal Register at 71
FR 6016–6021 to add 7 CFR 457.168
Mustard crop insurance provisions.
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The public was afforded 60 days to
submit written comments and opinions.
The e-mail address listed on the
proposed rule and the Federal
eRulemaking Portal address were not
operational during that time period,
therefore, FCIC published a notice in the
Federal Register at 71 FR 14828 on
March 24, 2006, extending the comment
period for an additional 30 days, until
April 24, 2006.
A total of 21 comments were received
from 3 commenters. The commenters
were an insurance services organization,
one insurance provider, and one
producer. The comments received and
FCIC’s responses are as follows:
Comment: Two commenters have
concerns whether a processor contract
can be accepted by the insurance
provider if the processor is located in
Canada. The commenters asked whether
it is the insurance provider’s
responsibility to perform the monetary
conversion of the contract price from
Canadian dollars to U.S. dollars.
Response: A contract can be accepted
if the processor is located in Canada. It
would be preferable if the contract
expressed the base contract price in U.S.
dollars. However, if the base contract
price is expressed in Canadian dollars
the insurance provider must convert it
to United States dollars based upon the
monetary exchange rate on the date the
contract was signed by the mustard
producer.
Comment: One commenter suggested
adding the definition for ‘‘windrow’’
since windrow is used in the definition
for swathed.
Response: FCIC has added a
definition for ‘‘windrow.’’
Comment: Two commenters
expressed concerns with section 3(c)
where it states ‘‘that for processor
contracts that stipulate the amount of
production to be delivered, the number
of acres is determined by dividing the
amount of production to be delivered by
the approved yield.’’ The commenters
questioned what happens if the
producer’s approved yield is so low that
when you divide the amount of
production to be delivered by the
approved yield more acres are needed to
be planted than were actually planted to
produce the amount of production
stated in the contract.
Response: FCIC has removed language
in section 3(c) and added a new section
3(d) and revised section 8(c) to explain
how to determine the total production
guarantee and insurable acreage. As
added in section 3(d), the total
production guarantee will be based on
the lesser of the contracted acreage
multiplied by the production guarantee
per acre, the planted acreage multiplied
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by the production guarantee per acre,
the total production stated in the
processor contract, or, for acreage and
production processor contracts, the
contracted acres multiplied by the
contracted production per acre. As
revised in section 8(c), insured acreage
for acreage and production based
processor contracts is based on the
lesser of the planted acres or the
maximum acres stated in the processor
contact. Insured acreage for production
based processor contracts will be based
on the lesser of the number of acres
determined by dividing the production
stated in the processor contract by the
approved yield or the planted acres.
These revisions will ensure that the
policy does not provide over-insurance.
Comment: One commenter suggested
in section 3(c) that in the parenthetical
phrase the term ‘‘stipulates’’ be changed
to ‘‘stipulate.’’
Response: FCIC has revised the
language in section 3(c) in response to
other comments and the term
‘‘stipulates’’ is no longer used in section
3(c).
Comment: One commenter expressed
concern regarding the removal of the
provision ‘‘to be processed into
products for human consumption’’ in
section 7(a)(2).
Response: FCIC removed the language
to allow maximum flexibility in
providing coverage for mustard used for
other uses. In addition, only mustard
that is produced under a processor
contract is insurable. Therefore, it is
unlikely that the processor will contract
for the mustard unless the processor has
a use for it.
Comment: Two commenters
expressed concerns with the provisions
in section 8(c) that indicate the
maximum insurable acreage will be
determined by the acreage amount
stated in the processor contract(s), if
applicable, The commenters asked what
the maximum insurable acreage would
be if the processor contract(s) do not
state acreage amounts.
Response: As stated above, FCIC has
added language in section 8(c)
explaining how to determine insurable
acreage. For processor contracts that
specify acreage only and processor
contracts that are acreage and
production based the insurable acreage
will be the lesser of the planted acres or
the acreage specified in the contract. For
processor contracts that are production
only based the insurable acreage will be
the lesser of the number of acres
determined by dividing the production
stated in the processor contract by the
approved yield or the planted acreage.
Comment: One commenter
recommended that section 10(b) be
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clarified as ‘‘Fire, due to natural causes’’
or ‘‘Fire, if caused by lighting’’ as is in
the proposed revision to the Tobacco
Crop Provisions.
Response: Section 12 of the Basic
Provisions states all specified causes of
loss must be due to a naturally
occurring event. Further, if the
requirement for natural causes was only
included with regard to fire, it may
create the mistaken impression that fire
is the only cause of action that must be
from natural causes. Therefore, no
change has been made.
Comment: One commenter stated the
provision in section 13(a)(1)(ii) that
states ‘‘For any processor contract that
stipulates the amount of production to
be delivered, and notwithstanding the
provisions of this section or any unit
division provisions contained in the
Basic Provisions or these Crop
Provisions’’ should have been included
in section 13(a)(2).
Response: FCIC moved the provision
to section 13(a)(2) accordingly.
Comment: One commenter suggested
FCIC add a hyphen between 650-pound
production guarantee in Example #1 in
section 13(b).
Response: FCIC has made the
correction accordingly.
Comment: One commenter suggested
FCIC change 13,000 pounds production
guarantee to 13,000 pound production
guarantee in the Example #1 in section
13(b).
Response: FCIC has made the
correction accordingly.
Comment: One commenter suggested
FCIC change the wording in the first
sentence from ‘‘with 650 pound
production guarantee’’ to ‘‘with a 650pound production guarantee’’ in
Example #2 in section 13(b).
Response: FCIC has made the
correction accordingly.
Comment: One commenter suggested
FCIC add a hyphen between 6,500
pound production guarantee in Example
#2 in section 13(b).
Response: FCIC has made the
correction accordingly.
Comment: One commenter suggested
FCIC delete the space after the ‘‘$’’ sign
in ‘‘$0.15’’ in Example #2 in section
13(b).
Response: FCIC has made the
correction accordingly.
Comment: One commenter stated in
section 13(b)(1) that ‘‘mustard type’’
does not need to be specified since type
is defined in section 1.
Response: FCIC has revised section
13(b)(1) accordingly.
Comment: One commenter expressed
concern regarding section 13(b)(1)
stating that when the contract states the
total production to be delivered with no
reference to acres.
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Response: FCIC has added language in
section 8(c) explaining how insurable
acreage is determined. In addition, FCIC
has added the cross reference to section
8(c) in section 13(b)(1) and changed the
reference to ‘‘insurable acreage’’ to be
consistent with section 8(c).
Comment: One commenter suggests
that the ‘‘and’’ at the end of section
13(c)(1)(iv)(B) should be moved to the
end of section 13(c)(2).
Response: FCIC has revised the
provision accordingly.
Comment: Two commenters
expressed concern regarding section
13(c)(3). The commenters concern was
with contracts that state the total
production to be delivered with no
reference to acres. The commenters
asked if the insurance provider
determines the insured has planted
more acres than what is necessary to
fulfill the contract does that production
on that over planted acreage count at the
time of loss, or are all the acres
considered insured.
Response: FCIC has added language in
section 8(c) explaining how insurable
acreage is determined. The insurance
provider should make this
determination before issuing the
Schedule of Insurance to ensure that the
premium and liability are correctly
stated.
Comment: One commenter expressed
concern with the provisions in section
13(d)(2) that state ‘‘mustard production
will be eligible for quality adjustment
if.’’ The commenter asked if contracts
are going to be honored from a processor
in Canada and whether there is any
concern on getting samples to determine
the quality adjustment.
Response: The quality adjustment can
be done by a Canadian grader as long as
U.S. grading standards are used, or the
sample can be pulled and brought to a
U.S. grading facility. No change has
been made.
Comment: One commenter suggested
in section 13(d)(4) moving the phrase ‘‘if
the quality adjustment factors are not
contained in the Special Provisions’’ to
the beginning of the parenthetical
phrase.
Response: FCIC has changed section
13(d)(4) accordingly.
Comment: One commenter
recommended eliminating the option to
increase prevented planting coverage
levels in section 15 Prevented Planting.
Response: Since the recommended
change was not proposed, no changes
were required as a result of comforming
amendments, and the public was not
provided an opportunity to comment on
the recommended change, the
recommendation cannot be incorporated
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in the final rule. No change has been
made.
Comment: One commenter asked why
mustard must be grown under contract.
Response: There is a very limited
market for mustard. Therefore, this
requirement ensures there is a market
for the mustard crop and that the market
is not distorted by an over-production of
mustard.
List of Subjects in 7 CFR Part 457
Crop insurance, Mustard, Reporting
and recordkeeping requirements.
Final Rule
Accordingly, as set forth in the
preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457 for
the 2009 and succeeding crop years as
follows:
I
PART 457—COMMON CROP
INSURANCE REGULATIONS
1. The authority citation for 7 CFR
part 457 continues to read as follows:
I
Authority: 7 U.S.C. 1506(l), 1506(p).
2. Section 457.168 is added to read as
follows:
I
§ 457.168 Mustard crop insurance
provisions.
The Mustard Crop Insurance
Provisions for the 2009 and succeeding
crop years are as follows:
FCIC policies:
United States Department of
Agriculture
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance
provider)
Both FCIC and reinsured policies:
Mustard Crop Insurance Provisions.
1. Definitions
Base contract price. The price per
pound (U.S. dollars) stipulated in the
processor contract (without regard to
discounts or incentives) that will be
used to determine your price election.
Harvest. Combining or threshing for
seed. A crop that is swathed prior to
combining is not considered harvested.
Mustard. A crop of the family
Cruciferae, genus.
Planted acreage. In addition to the
definition contained in the Basic
Provisions, mustard seed must be
planted in rows. Acreage planted in any
other manner will not be insurable
unless otherwise provided by the
Special Provisions, actuarial documents,
or by written agreement.
Processor. Any business enterprise
regularly engaged in buying and
processing mustard, that possesses all
licenses and permits for processing
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mustard required by the State in which
it operates, and that possesses facilities,
or has contractual access to such
facilities, with enough equipment to
accept and process contracted mustard
within a reasonable amount of time after
harvest.
Processor contract. A written
agreement between the producer and a
processor, containing at a minimum:
(a) The producer’s commitment to
plant and grow mustard of the types
specified in the Special Provisions and
to deliver the production to the
processor;
(b) The processor’s commitment to
purchase all the production stated in the
processor contract; and
(c) A base contract price (U.S.
dollars).
Salvage price. The cash price per
pound (U.S. dollars) for mustard
qualifying for quality adjustment in
accordance with section 13 of these
Crop Provisions.
Swathed. Severance of the stem and
seed pods from the ground and placing
into windrows without removal of the
seed from the pod.
Type. A category of mustard
identified as a type in the Special
Provisions.
Windrow. Mustard that is swathed
and placed in a row.
2. Unit Division
In addition to the requirements of
section 34 of the Basic Provisions,
optional units may also be established
by type, if types are designated on the
Special Provisions.
3. Insurance Guarantees, Coverage
Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of
section 3 of the Basic Provisions, you
may select only one base contract price
percentage for all the mustard in the
county insured under this policy unless
the Special Provisions allow different
base contract prices by type.
(b) If base contract prices are allowed
by type, you can select one base contract
price for each type designated in the
Special Provisions. The base contract
prices you choose must have the same
percentage relationship to the base
contract price (maximum price) offered
for each type. For example, if you
choose 100 percent of the maximum
price for a specific type, you must also
choose 100 percent of the maximum
price for all other types.
(c) If there are multiple base contract
prices within the same unit, each will
be considered a separate price election
that will be multiplied by the number of
insurable acres under applicable
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processor contract. These amounts will
be totaled to determine the premium,
liability, and indemnity for the unit.
(d) To determine the total production
guarantee, apply the lesser of the:
(1) Contracted acres multiplied by the
production guarantee (per acre);
(2) Planted acres multiplied by the
production guarantee (per acre);
(3) Total production stated in the
contract; or
(4) For acreage and production
contracts only, the contracted acres
multiplied by the contracted production
(per acre).
4. Contract Changes
In accordance with section 4 of the
Basic Provisions, the contract change
date is November 30 preceding the
cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the
Basic Provisions, the cancellation and
termination dates are March 15.
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6. Report of Acreage
In addition to the provisions in
section 6 of the Basic Provisions, you
must provide a copy of all processor
contracts to us on or before the acreage
reporting date.
7. Insured Crop
(a) In accordance with section 8 of the
Basic Provisions, the crop insured will
be all mustard in the county for which
a premium rate is provided by the
actuarial table:
(1) In which you have a share;
(2) That is planted for harvest as seed;
(3) That is grown under, and in
accordance with, the requirements of a
processor contract executed on or before
the acreage reporting date and is not
excluded from the processor contract at
any time during the crop year; and
(4) That is not, unless allowed by the
Special Provisions or by written
agreement:
(i) Interplanted with another crop; or
(ii) Planted into an established grass
or legume; or
(iii) Planted following the harvest of
any other crop in the same crop year.
(b) You will be considered to have a
share in the insured crop if, under the
processor contract, you retain control of
the acres on which the mustard is
grown, your income from the insured
crop is dependent on the amount of
production delivered, and the processor
contract provides for delivery of the
mustard under specified conditions and
at a stipulated base contract price.
(c) A commercial mustard producer
who is also a processor may establish an
insurable interest if the following
requirements are met:
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(1) The producer must comply with
these Crop Provisions;
(2) Prior to the sales closing date, the
Board of Directors or officers of the
processor must execute and adopt a
resolution that contains the same terms
as an acceptable processor contract.
Such resolution will be considered a
processor contract under this policy;
and
(3) Our inspection reveals that the
processing facilities comply with the
definition of a processor contained in
these Crop Provisions.
8. Insurable Acreage
In addition to the provisions of
section 9 of the Basic Provisions:
(a) Any acreage of the insured crop
that is damaged before the final planting
date, to the extent that a majority of
producers in the area would not
normally further care for the crop, must
be replanted unless we agree that it is
not practical to replant.
(b) We will not insure any acreage
that does not meet the rotation
requirements, if applicable, contained in
the Special Provisions.
(c) Insurable acreage will be:
(1) For acreage only based processor
contracts and acreage and production
based processor contracts which specify
a maximum number of acres, the lesser
of:
(i) The planted acres; or
(ii) The maximum number of acres
specified in the contract;
(2) For production only based
processor contracts, the lesser of:
(i) The number of acres determined by
dividing the production stated in the
processor contract by the approved
yield; or
(ii) The planted acres.
9. Insurance Period
In accordance with the provisions of
section 11 of the Basic Provisions, the
end of the insurance period is October
31 of the calendar year in which the
crop is normally harvested unless
otherwise stated in the Special
Provisions.
10. Causes of Loss
In accordance with the provisions of
section 12 of the Basic Provisions,
insurance is provided only against the
following causes of loss which occur
during the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to
insufficient or improper application of
pest control measures;
(d) Plant disease, but not damage due
to insufficient or improper application
of disease control measures;
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(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; and
(h) Failure of the irrigation water
supply, if applicable, caused by a cause
of loss specified in section 10(a) through
(g) that occurs during the insurance
period.
11. Replanting Payment
(a) In accordance with section 13 of
the Basic Provisions, a replanting
payment is allowed if the insured crop
is damaged by an insurable cause of loss
to the extent that the remaining stand
will not produce at least 90 percent of
the production guarantee for the
acreage, and it is practical to replant or
we require you to replant in accordance
with section 8(a).
(b) The maximum amount of the
replanting payment per acre will be the
lesser of 20 percent of the production
guarantee (per acre) or 175 pounds,
multiplied by the base contract price
applicable to the acreage to be
replanted, multiplied by your insured
share.
(c) When the mustard is replanted
using a practice that is uninsurable as
an original planting, the liability for the
unit will be reduced by the amount of
the replanting payment that is
attributable to your share. The premium
amount will not be reduced.
12. Duties In The Event of Damage or
Loss
In accordance with the requirements
of section 14 of the Basic Provisions, the
representative samples of the
unharvested crop that we may require
must be at least 10 feet wide and extend
the entire length of each field in the
unit. The samples must not be harvested
or destroyed until the earlier of our
inspection or 15 days after harvest of the
balance of the unit is completed.
13. Settlement of Claim
(a) We will determine your loss on a
unit basis.
(1) In the event you are unable to
provide separate acceptable production
records:
(i) For any optional units, we will
combine all optional units for which
acceptable production records were not
provided; or
(ii) For any basic units, we will
allocate any commingled production to
such units in proportion to our liability
on the harvested acreage for the units.
(2) For any processor contract that
stipulates only the amount of
production to be delivered, and not
withstanding the provisions of this
section or any unit division provisions
contained in the Basic Provisions, no
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indemnity will be paid for any loss of
production on any unit if the insured
produced a crop sufficient to fulfill the
processor contract(s) forming the basis
of the insurance guarantee
(b) In the event of loss or damage
covered by this policy, we will settle
your claim by:
(1) Multiplying the insurable acreage
of each type, if applicable, determined
in accordance with section 8(c), by its
respective production guarantee (per
acre);
(2) Multiplying each result in section
13(b)(1) by the respective base contract
price for each type, if applicable;
(3) Totaling the results in section
13(b)(2);
(4) Multiplying the production to be
counted for each type, if applicable (see
section 13(c), by its respective base
contract price (If you have multiple
processor contracts with varying base
contract prices within the same unit, we
will value your production to count by
using your highest base contract price
first and will continue in decreasing
order to your lowest base contract price
based on the amount of production
insured at each base contract price);
(5) Totaling the results in section
13(b)(4);
(6) Subtracting the total in section
13(b)(5) from the total in section
13(b)(3); and
(7) Multiplying the result in section
13(b)(6) by your share.
Example # 1 (with one base contract
price for the unit):
You have 100 percent share in 20
acres of mustard in a unit with a 650pound production guarantee (per acre)
and a base contract price of $0.15 per
pound. Due to insurable causes, you are
only able to harvest 10,000 pounds and
there is no appraised production. Your
indemnity would be calculated as
follows:
(1) 20 acres × 650 pounds = 13,000
pound production guarantee;
(2) 13,000 pounds × $0.15 base
contract price = $1,950 value of
guarantee;
(3) $1,950 total value of guarantee;
(4) 10,000 pounds × $0.15 base
contract price = $1,500 value of
production to count;
(5) $1,500 total value of production to
count;
(6) $1,950¥$1,500 = $450 loss; and
(7) $450 × 100 percent = $450
indemnity payment.
Example # 2 (with two base contract
prices for the same unit):
You have 100 percent share in 20
acres of mustard in a unit with a 650pound production guarantee (per acre),
10 acres with a base contract price of
$0.15 per pound, and 10 acres with a
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14:18 Feb 29, 2008
Jkt 214001
base contract price of $0.10 per pound.
Due to insurable causes, you are only
able to harvest 8,500 pounds and there
is no appraised production. Your
indemnity would be calculated as
follows:
(1) 10 acres × 650 pounds = 6,500pound production guarantee × $0.15
base contract price = $975 value
guarantee;
(2) 10 acres × 650 pounds = 6,500pound production guarantee × $0.10
base contract price = $650 value
guarantee;
(3) $975 + $650 = $1,625 total value
guarantee;
(4) 6,500 pounds of production to
count × $0.15 base contract price (higher
base contract price) = $975 value of
production to count;
(5) 2,000 pounds of production to
count × $0.10 base contract price (lower
base contract price) = $200 value of
production to count;
(6) $975 + $200 = $1,175 total value
of production to count;
(7) $1,625 total value guarantee—
$1,175 total value of production to
count = $450 loss; and
(8) $450 × 100 percent = $450
indemnity payment.
(c) The total production to count (in
pounds) from all insurable acreage in
the unit will include:
(1) All appraised production as
follows:
(i) Not less than the production
guarantee (per acre) for acreage:
(A) That is abandoned;
(B) That is put to another use without
our consent;
(C) That is damaged solely by
uninsured causes; or
(D) For which you fail to provide
acceptable production records;
(ii) Production lost due to uninsured
causes;
(iii) Unharvested production (mature
unharvested production may be
adjusted for quality deficiencies and
excess moisture in accordance with
section 13(d)); and
(iv) Potential production on insured
acreage that you intend to put to another
use or abandon, if you and we agree on
the appraised amount of production.
Upon such agreement, the insurance
period for that acreage will end when
you put the acreage to another use or
abandon the crop. If agreement on the
appraised amount of production is not
reached:
(A) If you do not elect to continue to
care for the crop, we may give you
consent to put the acreage to another
use if you agree to leave intact, and
provide sufficient care for,
representative samples of the crop in
locations acceptable to us (The amount
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Fmt 4700
Sfmt 4700
of production to count for such acreage
will be based on the harvested
production or appraisals from the
samples at the time harvest should have
occurred. If you do not leave the
required samples intact, or you fail to
provide sufficient care for the samples,
our appraisal made prior to giving you
consent to put the acreage to another
use will be used to determine the
amount of production to count.); or
(B) If you elect to continue to care for
the crop, the amount of production to
count for the acreage will be the
harvested production, or our reappraisal
if additional damage occurs and the
crop is not harvested;
(2) All harvested production from the
insurable acreage; and
(3) Any other uninsurable mustard
production that is delivered to fulfill the
processor contract.
(d) Mature mustard may be adjusted
for excess moisture and quality
deficiencies. If moisture adjustment is
applicable, it will be made prior to any
adjustment for quality.
(1) Mustard production will be
reduced by 0.12 percent for each 0.1
percentage point of moisture in excess
of 10.0 percent. We may obtain samples
of the production to determine the
moisture content.
(2) Mustard production will be
eligible for quality adjustment only if:
(i) Deficiencies in quality result in the
mustard not meeting the requirements
for acceptance under the processor
contract because of damaged seeds
(excluding heat damage), or a musty,
sour, or commercially objectionable
foreign odor; or
(ii) Substances or conditions are
present that are identified by the Food
and Drug Administration or other public
health organizations of the United States
as being injurious to human or animal
health.
(3) Quality will be a factor in
determining your loss in mustard
production only if:
(i) The deficiencies, substances, or
conditions specified in section 13(d)(2)
resulted from a cause of loss specified
in section 10 that occurs within the
insurance period; and
(ii) The deficiencies, substances, or
conditions specified in section 13(d)(2)
result in a salvage price less than the
base contract price; and
(iii) All determinations of these
deficiencies, substances, or conditions
specified in section 13(d)(2) are made
using samples of the production
obtained by us, by the processor
identified in the processor contract for
the insured acreage, or by a
disinterested third party approved by
us; and
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(iv) The samples are analyzed by a
grader in accordance with the Directive
for Inspection of Mustard Seed,
provided by the Federal Grain
Inspection Service or such other
directive or standards that may be
issued by FCIC.
(4) Mustard production that is eligible
for quality adjustment, as specified in
sections 13(d)(2) and (3), will be
reduced by multiplying the quality
adjustment factors contained in the
Special Provisions (if quality adjustment
factors are not contained in the Special
Provisions, the quality adjustment factor
is determined by dividing the salvage
price by the base contract price (not to
exceed 1.000)) by the number of pounds
remaining after any reduction due to
excessive moisture (the moistureadjusted gross pounds) of the damaged
or conditioned production.
(i) The salvage price will be
determined at the earlier of the date
such quality adjusted production is sold
or the date of final inspection for the
unit subject to the following conditions:
(A) Discounts used to establish the
salvage price will be limited to those
that are usual, customary, and
reasonable.
(B) The salvage price will not include
any reductions for:
(1) Moisture content;
(2) Damage due to uninsured causes;
(3) Drying, handling, processing, or
any other costs associated with normal
harvesting, handling, and marketing of
the mustard; except, if the salvage price
can be increased by conditioning, we
may reduce the salvage price, after the
production has been conditioned, by the
cost of conditioning but not lower than
the salvage price before conditioning;
and
(i) We may obtain salvage prices from
any buyer of our choice. If we obtain
salvage prices from one or more buyers
located outside your local market area,
we will reduce such price by the
additional costs required to deliver the
mustard to those buyers.
(ii) Factors not associated with
grading under the Directive for
Inspection of Mustard Seed, provided
by the Federal Grain Inspection Service
or such other directive or standards that
may be issued by FCIC including, but
not limited to, protein and oil will not
be considered.
(e) Any production harvested from
plants growing in the insured crop may
be counted as production of the insured
crop on an unadjusted weight basis.
14. Late Planting
In lieu of section 16(a) of the Basic
Provisions, the production guarantee
(per acre) for each acre planted to the
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14:18 Feb 29, 2008
Jkt 214001
insured crop during the late planting
period will be reduced by 1 percent per
day for each day planted after the final
planting date, unless otherwise
specified in the Special Provisions.
15. Prevented Planting
In addition to the provisions
contained in section 17 of the Basic
Provisions, your prevented planting
coverage will be 60 percent of your
production guarantee (per acre) for
timely planted acreage. When a portion
of the insurable acreage within the unit
is prevented from being planted, and
there is more than one base contract
price applicable to acreage in the unit,
the lowest base contract price will be
used in calculating any prevented
planting payment. If you have limited or
additional levels of coverage, as
specified in 7 CFR part 400, subpart T,
and pay an additional premium, you
may increase your prevented planting
coverage to the levels specified in the
actuarial documents.
Signed in Washington, DC, on February 20,
2008.
Eldon Gould,
Manager, Federal Crop Insurance
Corporation.
[FR Doc. E8–3963 Filed 2–29–08; 8:45 am]
BILLING CODE 3410–08–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 930
[Docket No. AMS–FV–07–0119; FV07–930–
3 FR]
Tart Cherries Grown in the States of
Michigan, et al.; Final Free and
Restricted Percentages for the 2007–
2008 Crop Year for Tart Cherries
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This rule establishes final free
and restricted percentages for 2007–
2008 crop year tart cherries covered
under the Federal marketing order
regulating tart cherries grown in seven
states (order). The percentages are 57
percent free and 43 percent restricted
and will establish the proportion of
cherries from the 2007 crop which may
be handled in commercial outlets. The
percentages are intended to stabilize
supplies and prices, and strengthen
market conditions. The percentages
were recommended by the Cherry
Industry Administrative Board (Board),
the body that locally administers the
order. The order regulates the handling
PO 00000
Frm 00019
Fmt 4700
Sfmt 4700
11323
of tart cherries grown in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin.
DATES: Effective Date: March 4, 2008.
This final rule applies to all 2007–2008
crop year restricted cherries until they
are properly disposed of in accordance
with marketing order requirements.
FOR FURTHER INFORMATION CONTACT:
Patricia A. Petrella or Kenneth G.
Johnson, DC Marketing Field Office,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, Unit 155, 4700 River
Road, Riverdale, MD 20737; telephone:
(301) 734–5243, Fax: (301) 734–5275;
e-mail Patricia.Petrella@usda.gov or
Kenneth.Johnson@usda.gov.
Small businesses may request
information on complying with this
regulation by contacting Jay Guerber,
Marketing Order Administration
Branch, Fruit and Vegetable Programs,
AMS, USDA, 1400 Independence
Avenue, SW., STOP 0237, Washington,
DC 20250–0237; telephone: (202) 720–
2491, Fax: (202) 720–8938, or e-mail:
Jay.Guerber@usda.gov.
SUPPLEMENTARY INFORMATION: This final
rule is issued under Marketing
Agreement and Order No. 930 (7 CFR
part 930), regulating the handling of tart
cherries produced in the States of
Michigan, New York, Pennsylvania,
Oregon, Utah, Washington, and
Wisconsin, hereinafter referred to as the
‘‘order.’’ The order is effective under the
Agricultural Marketing Agreement Act
of 1937, as amended (7 U.S.C. 601–674),
hereinafter referred to as the ‘‘Act.’’
The Department of Agriculture
(Department) is issuing this rule in
conformance with Executive Order
12866.
This final rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. Under the marketing
order provisions now in effect, final free
and restricted percentages may be
established for tart cherries handled by
handlers during the crop year. This final
rule establishes final free and restricted
percentages for tart cherries for the
2007–2008 crop year, beginning July 1,
2007, through June 30, 2008. This final
rule will not preempt any State or local
laws, regulations, or policies, unless
they present an irreconcilable conflict
with this rule.
The Act provides that administrative
proceedings must be exhausted before
parties may file suit in court. Under
section 608c(15)(A) of the Act, any
handler subject to an order may file
with the Secretary a petition stating that
the order, any provision of the order, or
any obligation imposed in connection
E:\FR\FM\03MRR1.SGM
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Agencies
[Federal Register Volume 73, Number 42 (Monday, March 3, 2008)]
[Rules and Regulations]
[Pages 11318-11323]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3963]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC04
Common Crop Insurance Regulations; Mustard Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
Common Crop Insurance Regulations; Mustard Crop Insurance Provisions to
convert the mustard pilot crop insurance program to a permanent
insurance program for the 2009 and succeeding crop years.
DATES: Effective Date: April 2, 2008.
FOR FURTHER INFORMATION CONTACT: Gary Johnson, Risk Management
Specialist, USDA Risk Management Agency-PASD, Beacon Facility-Mail Stop
0812, P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-
7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is non-significant for the purposes of Executive Order 12866 and,
therefore, it has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the provisions of 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 June
30, 2008.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
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 the various levels of
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 will preempt
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 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 economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background:
On Thursday, November 16, 2006, FCIC published a notice of proposed
rulemaking in the Federal Register at 71 FR 6016-6021 to add 7 CFR
457.168 Mustard crop insurance provisions.
[[Page 11319]]
The public was afforded 60 days to submit written comments and
opinions. The e-mail address listed on the proposed rule and the
Federal eRulemaking Portal address were not operational during that
time period, therefore, FCIC published a notice in the Federal Register
at 71 FR 14828 on March 24, 2006, extending the comment period for an
additional 30 days, until April 24, 2006.
A total of 21 comments were received from 3 commenters. The
commenters were an insurance services organization, one insurance
provider, and one producer. The comments received and FCIC's responses
are as follows:
Comment: Two commenters have concerns whether a processor contract
can be accepted by the insurance provider if the processor is located
in Canada. The commenters asked whether it is the insurance provider's
responsibility to perform the monetary conversion of the contract price
from Canadian dollars to U.S. dollars.
Response: A contract can be accepted if the processor is located in
Canada. It would be preferable if the contract expressed the base
contract price in U.S. dollars. However, if the base contract price is
expressed in Canadian dollars the insurance provider must convert it to
United States dollars based upon the monetary exchange rate on the date
the contract was signed by the mustard producer.
Comment: One commenter suggested adding the definition for
``windrow'' since windrow is used in the definition for swathed.
Response: FCIC has added a definition for ``windrow.''
Comment: Two commenters expressed concerns with section 3(c) where
it states ``that for processor contracts that stipulate the amount of
production to be delivered, the number of acres is determined by
dividing the amount of production to be delivered by the approved
yield.'' The commenters questioned what happens if the producer's
approved yield is so low that when you divide the amount of production
to be delivered by the approved yield more acres are needed to be
planted than were actually planted to produce the amount of production
stated in the contract.
Response: FCIC has removed language in section 3(c) and added a new
section 3(d) and revised section 8(c) to explain how to determine the
total production guarantee and insurable acreage. As added in section
3(d), the total production guarantee will be based on the lesser of the
contracted acreage multiplied by the production guarantee per acre, the
planted acreage multiplied by the production guarantee per acre, the
total production stated in the processor contract, or, for acreage and
production processor contracts, the contracted acres multiplied by the
contracted production per acre. As revised in section 8(c), insured
acreage for acreage and production based processor contracts is based
on the lesser of the planted acres or the maximum acres stated in the
processor contact. Insured acreage for production based processor
contracts will be based on the lesser of the number of acres determined
by dividing the production stated in the processor contract by the
approved yield or the planted acres. These revisions will ensure that
the policy does not provide over-insurance.
Comment: One commenter suggested in section 3(c) that in the
parenthetical phrase the term ``stipulates'' be changed to
``stipulate.''
Response: FCIC has revised the language in section 3(c) in response
to other comments and the term ``stipulates'' is no longer used in
section 3(c).
Comment: One commenter expressed concern regarding the removal of
the provision ``to be processed into products for human consumption''
in section 7(a)(2).
Response: FCIC removed the language to allow maximum flexibility in
providing coverage for mustard used for other uses. In addition, only
mustard that is produced under a processor contract is insurable.
Therefore, it is unlikely that the processor will contract for the
mustard unless the processor has a use for it.
Comment: Two commenters expressed concerns with the provisions in
section 8(c) that indicate the maximum insurable acreage will be
determined by the acreage amount stated in the processor contract(s),
if applicable, The commenters asked what the maximum insurable acreage
would be if the processor contract(s) do not state acreage amounts.
Response: As stated above, FCIC has added language in section 8(c)
explaining how to determine insurable acreage. For processor contracts
that specify acreage only and processor contracts that are acreage and
production based the insurable acreage will be the lesser of the
planted acres or the acreage specified in the contract. For processor
contracts that are production only based the insurable acreage will be
the lesser of the number of acres determined by dividing the production
stated in the processor contract by the approved yield or the planted
acreage.
Comment: One commenter recommended that section 10(b) be clarified
as ``Fire, due to natural causes'' or ``Fire, if caused by lighting''
as is in the proposed revision to the Tobacco Crop Provisions.
Response: Section 12 of the Basic Provisions states all specified
causes of loss must be due to a naturally occurring event. Further, if
the requirement for natural causes was only included with regard to
fire, it may create the mistaken impression that fire is the only cause
of action that must be from natural causes. Therefore, no change has
been made.
Comment: One commenter stated the provision in section 13(a)(1)(ii)
that states ``For any processor contract that stipulates the amount of
production to be delivered, and notwithstanding the provisions of this
section or any unit division provisions contained in the Basic
Provisions or these Crop Provisions'' should have been included in
section 13(a)(2).
Response: FCIC moved the provision to section 13(a)(2) accordingly.
Comment: One commenter suggested FCIC add a hyphen between 650-
pound production guarantee in Example 1 in section 13(b).
Response: FCIC has made the correction accordingly.
Comment: One commenter suggested FCIC change 13,000 pounds
production guarantee to 13,000 pound production guarantee in the
Example 1 in section 13(b).
Response: FCIC has made the correction accordingly.
Comment: One commenter suggested FCIC change the wording in the
first sentence from ``with 650 pound production guarantee'' to ``with a
650-pound production guarantee'' in Example 2 in section
13(b).
Response: FCIC has made the correction accordingly.
Comment: One commenter suggested FCIC add a hyphen between 6,500
pound production guarantee in Example 2 in section 13(b).
Response: FCIC has made the correction accordingly.
Comment: One commenter suggested FCIC delete the space after the
``$'' sign in ``$0.15'' in Example 2 in section 13(b).
Response: FCIC has made the correction accordingly.
Comment: One commenter stated in section 13(b)(1) that ``mustard
type'' does not need to be specified since type is defined in section
1.
Response: FCIC has revised section 13(b)(1) accordingly.
Comment: One commenter expressed concern regarding section 13(b)(1)
stating that when the contract states the total production to be
delivered with no reference to acres.
[[Page 11320]]
Response: FCIC has added language in section 8(c) explaining how
insurable acreage is determined. In addition, FCIC has added the cross
reference to section 8(c) in section 13(b)(1) and changed the reference
to ``insurable acreage'' to be consistent with section 8(c).
Comment: One commenter suggests that the ``and'' at the end of
section 13(c)(1)(iv)(B) should be moved to the end of section 13(c)(2).
Response: FCIC has revised the provision accordingly.
Comment: Two commenters expressed concern regarding section
13(c)(3). The commenters concern was with contracts that state the
total production to be delivered with no reference to acres. The
commenters asked if the insurance provider determines the insured has
planted more acres than what is necessary to fulfill the contract does
that production on that over planted acreage count at the time of loss,
or are all the acres considered insured.
Response: FCIC has added language in section 8(c) explaining how
insurable acreage is determined. The insurance provider should make
this determination before issuing the Schedule of Insurance to ensure
that the premium and liability are correctly stated.
Comment: One commenter expressed concern with the provisions in
section 13(d)(2) that state ``mustard production will be eligible for
quality adjustment if.'' The commenter asked if contracts are going to
be honored from a processor in Canada and whether there is any concern
on getting samples to determine the quality adjustment.
Response: The quality adjustment can be done by a Canadian grader
as long as U.S. grading standards are used, or the sample can be pulled
and brought to a U.S. grading facility. No change has been made.
Comment: One commenter suggested in section 13(d)(4) moving the
phrase ``if the quality adjustment factors are not contained in the
Special Provisions'' to the beginning of the parenthetical phrase.
Response: FCIC has changed section 13(d)(4) accordingly.
Comment: One commenter recommended eliminating the option to
increase prevented planting coverage levels in section 15 Prevented
Planting.
Response: Since the recommended change was not proposed, no changes
were required as a result of comforming amendments, and the public was
not provided an opportunity to comment on the recommended change, the
recommendation cannot be incorporated in the final rule. No change has
been made.
Comment: One commenter asked why mustard must be grown under
contract.
Response: There is a very limited market for mustard. Therefore,
this requirement ensures there is a market for the mustard crop and
that the market is not distorted by an over-production of mustard.
List of Subjects in 7 CFR Part 457
Crop insurance, Mustard, Reporting and recordkeeping requirements.
Final Rule
0
Accordingly, as set forth in the preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457 for the 2009 and succeeding crop
years as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
0
2. Section 457.168 is added to read as follows:
Sec. 457.168 Mustard crop insurance provisions.
The Mustard Crop Insurance Provisions for the 2009 and succeeding
crop years are as follows:
FCIC policies:
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured policies:
(Appropriate title for insurance provider)
Both FCIC and reinsured policies:
Mustard Crop Insurance Provisions.
1. Definitions
Base contract price. The price per pound (U.S. dollars) stipulated
in the processor contract (without regard to discounts or incentives)
that will be used to determine your price election.
Harvest. Combining or threshing for seed. A crop that is swathed
prior to combining is not considered harvested.
Mustard. A crop of the family Cruciferae, genus.
Planted acreage. In addition to the definition contained in the
Basic Provisions, mustard seed must be planted in rows. Acreage planted
in any other manner will not be insurable unless otherwise provided by
the Special Provisions, actuarial documents, or by written agreement.
Processor. Any business enterprise regularly engaged in buying and
processing mustard, that possesses all licenses and permits for
processing mustard required by the State in which it operates, and that
possesses facilities, or has contractual access to such facilities,
with enough equipment to accept and process contracted mustard within a
reasonable amount of time after harvest.
Processor contract. A written agreement between the producer and a
processor, containing at a minimum:
(a) The producer's commitment to plant and grow mustard of the
types specified in the Special Provisions and to deliver the production
to the processor;
(b) The processor's commitment to purchase all the production
stated in the processor contract; and
(c) A base contract price (U.S. dollars).
Salvage price. The cash price per pound (U.S. dollars) for mustard
qualifying for quality adjustment in accordance with section 13 of
these Crop Provisions.
Swathed. Severance of the stem and seed pods from the ground and
placing into windrows without removal of the seed from the pod.
Type. A category of mustard identified as a type in the Special
Provisions.
Windrow. Mustard that is swathed and placed in a row.
2. Unit Division
In addition to the requirements of section 34 of the Basic
Provisions, optional units may also be established by type, if types
are designated on the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
(a) In addition to the requirements of section 3 of the Basic
Provisions, you may select only one base contract price percentage for
all the mustard in the county insured under this policy unless the
Special Provisions allow different base contract prices by type.
(b) If base contract prices are allowed by type, you can select one
base contract price for each type designated in the Special Provisions.
The base contract prices you choose must have the same percentage
relationship to the base contract price (maximum price) offered for
each type. For example, if you choose 100 percent of the maximum price
for a specific type, you must also choose 100 percent of the maximum
price for all other types.
(c) If there are multiple base contract prices within the same
unit, each will be considered a separate price election that will be
multiplied by the number of insurable acres under applicable
[[Page 11321]]
processor contract. These amounts will be totaled to determine the
premium, liability, and indemnity for the unit.
(d) To determine the total production guarantee, apply the lesser
of the:
(1) Contracted acres multiplied by the production guarantee (per
acre);
(2) Planted acres multiplied by the production guarantee (per
acre);
(3) Total production stated in the contract; or
(4) For acreage and production contracts only, the contracted acres
multiplied by the contracted production (per acre).
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is November 30 preceding the cancellation date.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are March 15.
6. Report of Acreage
In addition to the provisions in section 6 of the Basic Provisions,
you must provide a copy of all processor contracts to us on or before
the acreage reporting date.
7. Insured Crop
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all mustard in the county for which a premium rate is
provided by the actuarial table:
(1) In which you have a share;
(2) That is planted for harvest as seed;
(3) That is grown under, and in accordance with, the requirements
of a processor contract executed on or before the acreage reporting
date and is not excluded from the processor contract at any time during
the crop year; and
(4) That is not, unless allowed by the Special Provisions or by
written agreement:
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume; or
(iii) Planted following the harvest of any other crop in the same
crop year.
(b) You will be considered to have a share in the insured crop if,
under the processor contract, you retain control of the acres on which
the mustard is grown, your income from the insured crop is dependent on
the amount of production delivered, and the processor contract provides
for delivery of the mustard under specified conditions and at a
stipulated base contract price.
(c) A commercial mustard producer who is also a processor may
establish an insurable interest if the following requirements are met:
(1) The producer must comply with these Crop Provisions;
(2) Prior to the sales closing date, the Board of Directors or
officers of the processor must execute and adopt a resolution that
contains the same terms as an acceptable processor contract. Such
resolution will be considered a processor contract under this policy;
and
(3) Our inspection reveals that the processing facilities comply
with the definition of a processor contained in these Crop Provisions.
8. Insurable Acreage
In addition to the provisions of section 9 of the Basic Provisions:
(a) Any acreage of the insured crop that is damaged before the
final planting date, to the extent that a majority of producers in the
area would not normally further care for the crop, must be replanted
unless we agree that it is not practical to replant.
(b) We will not insure any acreage that does not meet the rotation
requirements, if applicable, contained in the Special Provisions.
(c) Insurable acreage will be:
(1) For acreage only based processor contracts and acreage and
production based processor contracts which specify a maximum number of
acres, the lesser of:
(i) The planted acres; or
(ii) The maximum number of acres specified in the contract;
(2) For production only based processor contracts, the lesser of:
(i) The number of acres determined by dividing the production
stated in the processor contract by the approved yield; or
(ii) The planted acres.
9. Insurance Period
In accordance with the provisions of section 11 of the Basic
Provisions, the end of the insurance period is October 31 of the
calendar year in which the crop is normally harvested unless otherwise
stated in the Special Provisions.
10. Causes of Loss
In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss which occur during the insurance period:
(a) Adverse weather conditions;
(b) Fire;
(c) Insects, but not damage due to insufficient or improper
application of pest control measures;
(d) Plant disease, but not damage due to insufficient or improper
application of disease control measures;
(e) Wildlife;
(f) Earthquake;
(g) Volcanic eruption; and
(h) Failure of the irrigation water supply, if applicable, caused
by a cause of loss specified in section 10(a) through (g) that occurs
during the insurance period.
11. Replanting Payment
(a) In accordance with section 13 of the Basic Provisions, a
replanting payment is allowed if the insured crop is damaged by an
insurable cause of loss to the extent that the remaining stand will not
produce at least 90 percent of the production guarantee for the
acreage, and it is practical to replant or we require you to replant in
accordance with section 8(a).
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20 percent of the production guarantee (per acre) or 175
pounds, multiplied by the base contract price applicable to the acreage
to be replanted, multiplied by your insured share.
(c) When the mustard is replanted using a practice that is
uninsurable as an original planting, the liability for the unit will be
reduced by the amount of the replanting payment that is attributable to
your share. The premium amount will not be reduced.
12. Duties In The Event of Damage or Loss
In accordance with the requirements of section 14 of the Basic
Provisions, the representative samples of the unharvested crop that we
may require must be at least 10 feet wide and extend the entire length
of each field in the unit. The samples must not be harvested or
destroyed until the earlier of our inspection or 15 days after harvest
of the balance of the unit is completed.
13. Settlement of Claim
(a) We will determine your loss on a unit basis.
(1) In the event you are unable to provide separate acceptable
production records:
(i) For any optional units, we will combine all optional units for
which acceptable production records were not provided; or
(ii) For any basic units, we will allocate any commingled
production to such units in proportion to our liability on the
harvested acreage for the units.
(2) For any processor contract that stipulates only the amount of
production to be delivered, and not withstanding the provisions of this
section or any unit division provisions contained in the Basic
Provisions, no
[[Page 11322]]
indemnity will be paid for any loss of production on any unit if the
insured produced a crop sufficient to fulfill the processor contract(s)
forming the basis of the insurance guarantee
(b) In the event of loss or damage covered by this policy, we will
settle your claim by:
(1) Multiplying the insurable acreage of each type, if applicable,
determined in accordance with section 8(c), by its respective
production guarantee (per acre);
(2) Multiplying each result in section 13(b)(1) by the respective
base contract price for each type, if applicable;
(3) Totaling the results in section 13(b)(2);
(4) Multiplying the production to be counted for each type, if
applicable (see section 13(c), by its respective base contract price
(If you have multiple processor contracts with varying base contract
prices within the same unit, we will value your production to count by
using your highest base contract price first and will continue in
decreasing order to your lowest base contract price based on the amount
of production insured at each base contract price);
(5) Totaling the results in section 13(b)(4);
(6) Subtracting the total in section 13(b)(5) from the total in
section 13(b)(3); and
(7) Multiplying the result in section 13(b)(6) by your share.
Example 1 (with one base contract price for the unit):
You have 100 percent share in 20 acres of mustard in a unit with a
650-pound production guarantee (per acre) and a base contract price of
$0.15 per pound. Due to insurable causes, you are only able to harvest
10,000 pounds and there is no appraised production. Your indemnity
would be calculated as follows:
(1) 20 acres x 650 pounds = 13,000 pound production guarantee;
(2) 13,000 pounds x $0.15 base contract price = $1,950 value of
guarantee;
(3) $1,950 total value of guarantee;
(4) 10,000 pounds x $0.15 base contract price = $1,500 value of
production to count;
(5) $1,500 total value of production to count;
(6) $1,950-$1,500 = $450 loss; and
(7) $450 x 100 percent = $450 indemnity payment.
Example 2 (with two base contract prices for the same
unit):
You have 100 percent share in 20 acres of mustard in a unit with a
650-pound production guarantee (per acre), 10 acres with a base
contract price of $0.15 per pound, and 10 acres with a base contract
price of $0.10 per pound. Due to insurable causes, you are only able to
harvest 8,500 pounds and there is no appraised production. Your
indemnity would be calculated as follows:
(1) 10 acres x 650 pounds = 6,500-pound production guarantee x
$0.15 base contract price = $975 value guarantee;
(2) 10 acres x 650 pounds = 6,500-pound production guarantee x
$0.10 base contract price = $650 value guarantee;
(3) $975 + $650 = $1,625 total value guarantee;
(4) 6,500 pounds of production to count x $0.15 base contract price
(higher base contract price) = $975 value of production to count;
(5) 2,000 pounds of production to count x $0.10 base contract price
(lower base contract price) = $200 value of production to count;
(6) $975 + $200 = $1,175 total value of production to count;
(7) $1,625 total value guarantee--$1,175 total value of production
to count = $450 loss; and
(8) $450 x 100 percent = $450 indemnity payment.
(c) The total production to count (in pounds) from all insurable
acreage in the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee (per acre) for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide acceptable production records;
(ii) Production lost due to uninsured causes;
(iii) Unharvested production (mature unharvested production may be
adjusted for quality deficiencies and excess moisture in accordance
with section 13(d)); and
(iv) Potential production on insured acreage that you intend to put
to another use or abandon, if you and we agree on the appraised amount
of production. Upon such agreement, the insurance period for that
acreage will end when you put the acreage to another use or abandon the
crop. If agreement on the appraised amount of production is not
reached:
(A) If you do not elect to continue to care for the crop, we may
give you consent to put the acreage to another use if you agree to
leave intact, and provide sufficient care for, representative samples
of the crop in locations acceptable to us (The amount of production to
count for such acreage will be based on the harvested production or
appraisals from the samples at the time harvest should have occurred.
If you do not leave the required samples intact, or you fail to provide
sufficient care for the samples, our appraisal made prior to giving you
consent to put the acreage to another use will be used to determine the
amount of production to count.); or
(B) If you elect to continue to care for the crop, the amount of
production to count for the acreage will be the harvested production,
or our reappraisal if additional damage occurs and the crop is not
harvested;
(2) All harvested production from the insurable acreage; and
(3) Any other uninsurable mustard production that is delivered to
fulfill the processor contract.
(d) Mature mustard may be adjusted for excess moisture and quality
deficiencies. If moisture adjustment is applicable, it will be made
prior to any adjustment for quality.
(1) Mustard production will be reduced by 0.12 percent for each 0.1
percentage point of moisture in excess of 10.0 percent. We may obtain
samples of the production to determine the moisture content.
(2) Mustard production will be eligible for quality adjustment only
if:
(i) Deficiencies in quality result in the mustard not meeting the
requirements for acceptance under the processor contract because of
damaged seeds (excluding heat damage), or a musty, sour, or
commercially objectionable foreign odor; or
(ii) Substances or conditions are present that are identified by
the Food and Drug Administration or other public health organizations
of the United States as being injurious to human or animal health.
(3) Quality will be a factor in determining your loss in mustard
production only if:
(i) The deficiencies, substances, or conditions specified in
section 13(d)(2) resulted from a cause of loss specified in section 10
that occurs within the insurance period; and
(ii) The deficiencies, substances, or conditions specified in
section 13(d)(2) result in a salvage price less than the base contract
price; and
(iii) All determinations of these deficiencies, substances, or
conditions specified in section 13(d)(2) are made using samples of the
production obtained by us, by the processor identified in the processor
contract for the insured acreage, or by a disinterested third party
approved by us; and
[[Page 11323]]
(iv) The samples are analyzed by a grader in accordance with the
Directive for Inspection of Mustard Seed, provided by the Federal Grain
Inspection Service or such other directive or standards that may be
issued by FCIC.
(4) Mustard production that is eligible for quality adjustment, as
specified in sections 13(d)(2) and (3), will be reduced by multiplying
the quality adjustment factors contained in the Special Provisions (if
quality adjustment factors are not contained in the Special Provisions,
the quality adjustment factor is determined by dividing the salvage
price by the base contract price (not to exceed 1.000)) by the number
of pounds remaining after any reduction due to excessive moisture (the
moisture-adjusted gross pounds) of the damaged or conditioned
production.
(i) The salvage price will be determined at the earlier of the date
such quality adjusted production is sold or the date of final
inspection for the unit subject to the following conditions:
(A) Discounts used to establish the salvage price will be limited
to those that are usual, customary, and reasonable.
(B) The salvage price will not include any reductions for:
(1) Moisture content;
(2) Damage due to uninsured causes;
(3) Drying, handling, processing, or any other costs associated
with normal harvesting, handling, and marketing of the mustard; except,
if the salvage price can be increased by conditioning, we may reduce
the salvage price, after the production has been conditioned, by the
cost of conditioning but not lower than the salvage price before
conditioning; and
(i) We may obtain salvage prices from any buyer of our choice. If
we obtain salvage prices from one or more buyers located outside your
local market area, we will reduce such price by the additional costs
required to deliver the mustard to those buyers.
(ii) Factors not associated with grading under the Directive for
Inspection of Mustard Seed, provided by the Federal Grain Inspection
Service or such other directive or standards that may be issued by FCIC
including, but not limited to, protein and oil will not be considered.
(e) Any production harvested from plants growing in the insured
crop may be counted as production of the insured crop on an unadjusted
weight basis.
14. Late Planting
In lieu of section 16(a) of the Basic Provisions, the production
guarantee (per acre) for each acre planted to the insured crop during
the late planting period will be reduced by 1 percent per day for each
day planted after the final planting date, unless otherwise specified
in the Special Provisions.
15. Prevented Planting
In addition to the provisions contained in section 17 of the Basic
Provisions, your prevented planting coverage will be 60 percent of your
production guarantee (per acre) for timely planted acreage. When a
portion of the insurable acreage within the unit is prevented from
being planted, and there is more than one base contract price
applicable to acreage in the unit, the lowest base contract price will
be used in calculating any prevented planting payment. If you have
limited or additional levels of coverage, as specified in 7 CFR part
400, subpart T, and pay an additional premium, you may increase your
prevented planting coverage to the levels specified in the actuarial
documents.
Signed in Washington, DC, on February 20, 2008.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
[FR Doc. E8-3963 Filed 2-29-08; 8:45 am]
BILLING CODE 3410-08-P