Common Crop Insurance Regulations; Pecan Revenue Crop Insurance Provisions, 71276-71280 [2011-29217]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Proposed Rules]
[Pages 71276-71280]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29217]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-11-0008]
RIN 0563-AC35


Common Crop Insurance Regulations; Pecan Revenue Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Common Crop Insurance Regulations, Pecan Revenue Crop 
Insurance Provisions. The intended effect of this action is to provide 
policy changes, to clarify existing policy provisions to better meet 
the needs of insured producers, and to reduce vulnerability to program 
fraud, waste, and abuse. The proposed changes will be effective for the 
2013 and succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business January 17, 2012 and will be 
considered when the rule is to be made final.

ADDRESSES: FCIC prefers that comments be submitted electronically 
through the Federal eRulemaking Portal. You may submit comments, 
identified by Docket ID No. FCIC-11-0008, by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205.

All comments received, including those received by mail, will be posted 
without change to https://www.regulations.gov, including any personal 
information provided, and can be accessed by the public. All comments 
must include the agency name and docket number or Regulatory 
Information Number (RIN) for this rule. For detailed instructions on 
submitting comments and additional information, see https://www.regulations.gov. If you are submitting comments electronically 
through the Federal eRulemaking Portal and want to attach a document, 
we ask that it be in a text-based format. If you want to attach a 
document that is a scanned Adobe PDF file, it must be scanned as text 
and not as an image, thus allowing FCIC to search and copy certain 
portions of your submissions. For questions regarding attaching a 
document that is a scanned Adobe PDF file, please contact the RMA Web 
Content Team at (816) 823-4694 or by email at 
rmaweb.content@rma.usda.gov.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received for any dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
complete User Notice and Privacy Notice for Regulations.gov at https://www.regulations.gov/#!privacyNotice.

FOR FURTHER INFORMATION CONTACT: Chief, Policy Administration Branch, 
Product Administration and Standards Division, Risk Management Agency, 
United States Department of Agriculture, Beacon Facility, Stop 0812, 
Room 421, P.O. Box 419205, Kansas City, MO 64141-6205, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be non-significant for the 
purposes of Executive Order 12866 and, therefore, it has not been 
reviewed by the 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.

[[Page 71277]]

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.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

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 or 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 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

    FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR 
part 457) by revising Sec.  457.167 Pecan Revenue Crop Insurance 
Provisions, to be effective for the 2013 and succeeding crop years. The 
proposed changes are as follows:
    1. Section 1--FCIC proposes to revise the definition of ``average 
gross sales per acre'' by removing specific crop years from the 
example. This change is being proposed because the crop years listed in 
the example are outdated. Removing the specific crop years does not 
change the meaning of the example. This proposed change will alleviate 
the need to change the crop years in the example each time the Pecan 
Revenue Crop Insurance Provisions are revised.
    FCIC proposes to revise the definition of ``approved average 
revenue per acre'' by changing the maximum number of years of average 
gross sales used to calculate approved average revenue per acre from 
ten to six years. This change is being proposed based on 
recommendations from a FCIC contracted study that found that a shorter 
base period works as well or better for predicting actual yields for 
some perennial crops. The shorter base period will be more responsive 
to market trends and changes in the productive capacity of the trees.
    FCIC proposes to remove the references to ``lowest available dollar 
span'' from the definition of ``approved average revenue per acre'' and 
replace it with the term ``T-revenue.'' The ``T-revenue'' will be used 
in place of the ``lowest available dollar span'' when sufficient 
records are not provided. FCIC will develop a ``T-revenue'' that will 
represent a value similar to the current ``lowest available dollar 
span.'' This change is being proposed to facilitate the implementation 
of a continuous rating methodology to be consistent with other 
policies. Under the current rating methodology a rate class is assigned 
based on which ``dollar span'' the insured's average approved revenue 
falls into. Removing references to ``dollar spans'' and developing a 
``T-revenue'' is necessary in order to migrate to the continuous rating 
methodology because under the new continuous rating methodology 
``dollar spans'' will no longer be used.
    FCIC proposes to remove the definition of ``enterprise unit'' from 
the current Pecan Revenue Crop Insurance Provisions and use the 
definition of ``enterprise unit'' contained in the Common Crop 
Insurance Policy Basic Provisions. The Basic Provisions contain 
additional requirements to qualify for an ``enterprise unit'' that are 
not contained in the current definition of ``enterprise unit'' in the 
Pecan Revenue Crop Insurance Provisions. This change will make the unit 
structures under the Pecan Revenue Crop Insurance Provisions consistent

[[Page 71278]]

with other crop programs administered by FCIC.
    FCIC proposes to revise the definition of ``market price'' by:
    a. Removing subparagraph (2) of the definition that references the 
actual price received. With the proposed revision to section 13(d)(2), 
the price received will be used to value any production that is sold 
unless the price received is not verifiable by sales receipts or is 
determined to be inappropriate. Since market price will only be used to 
value unsold production or sold production in which the price received 
is inappropriate or unverifiable, it is not necessary to list the price 
received in the definition of market price;
    b. Revising the introductory paragraph by removing the phrase ``the 
greater of'' and redesignating subparagraph (3) as subparagraph (1) to 
make Agricultural Marketing Service (AMS) prices the primary source for 
determining market price. FCIC proposes to add language to clarify the 
AMS price used must be from the nearest location and must be of similar 
quality, quantity and variety of in-shell pecans. FCIC proposes adding 
the phrase ``unless otherwise provided in the Special Provisions'' to 
the end of the first sentence of the subparagraph that references AMS 
prices to allow flexibility to alter this section should AMS change or 
discontinue their current pecan reports; and
    c. Redesignating subparagraph (1) as subparagraph (2) and adding 
the phrase ``if AMS prices are not published for the week'' to the 
beginning of newly redesignated subparagraph (2). This proposed change 
will make this provision an alternative method of determining market 
price if for any reason AMS does not publish prices for the week. This 
change is being proposed because using the AMS price will provide a 
more reliable and consistent price to value appraised production.
    FCIC proposes to remove the definition of ``set out'' because all 
other references to this term within the policy are proposed to be 
removed.
    FCIC proposes to add the definition of ``transitional revenue (T-
revenue)'' that will be used in place of the ``lowest available dollar 
span.'' The ``T-revenue'' will be an amount determined by FCIC and 
provided in the actuarial documents. FCIC plans to establish a ``T-
revenue'' that is comparable to the current ``lowest available dollar 
span.'' The ``T-revenue'' may be adjusted as more revenue data is 
collected.
    2. Section 2--FCIC proposes to revise section 2 to state that 
enterprise units are defined in accordance with the Basic Provisions 
and are available only if allowed by the Special Provisions. This 
change is necessary to make the Pecan Revenue Crop Insurance Provisions 
consistent with the Common Crop Insurance Policy Basic Provisions. FCIC 
intends to allow enterprise units through the Special Provisions.
    FCIC proposes to revise section 2 to allow basic units to be 
divided into optional units if optional units are located on non-
contiguous land, separate records of production are provided for at 
least the most recent consecutive two crop years that verify trees in 
the optional unit meet the minimum production requirement, and optional 
units are selected by the acreage reporting date for the first year of 
the two year coverage module. Optional units by non-contiguous land are 
being proposed at the request of producers. The proposed requirements 
to qualify for optional units are similar to those that are contained 
in the Basic Provisions, but due to the ``two-year coverage module,'' 
the requirements have been modified to be applicable to the Pecan 
Revenue Crop Insurance Provisions. Premium rates will be adjusted to 
compensate for any additional risk associated with optional units.
    3. Section 3--FCIC proposes to revise section 3 by removing all 
references to the ``lowest available dollar span'' and replacing it 
with the term ``T-revenue.''
    FCIC proposes to revise section 3(d)(1) by removing the provision 
that contains a factor used to reduce your average gross sales for 
acres that are sequentially thinned. The provision is being proposed to 
be removed because it is ambiguous and discourages good management 
practices. Language in sections 3(d)(3) and 6(b) provides consequences 
for sequential thinning when the thinning is expected to reduce gross 
sales below the approved average revenue.
    FCIC proposes to add a new section 3(d)(1) that states if you fail 
to provide acceptable records for optional units, those units will be 
combined into basic units and your amount of insurance per acre will be 
recalculated for the two-year coverage module. This provision provides 
the consequence for failure to provide acceptable records for optional 
units which is consistent with other crop programs.
    4. Section 4--FCIC proposes to amend section 4(b) by removing RMA's 
Web site address because this is defined in the Basic Provisions.
    FCIC proposes to amend section 4(d) by adding the statement, ``if 
available from us, you may elect to receive these documents and changes 
electronically.'' This statement is being proposed to provide 
consistency with the Basic Provisions. Section 4 of the Basic 
Provisions provides that producers may elect to receive documents and 
changes electronically. However, the introductory paragraph of section 
4 of the Pecan Revenue Crop Insurance Provisions contains the phrase, 
``in lieu of the provisions contained in section 4 of the Basic 
Provisions.'' Therefore, in order to provide consistency with the Basic 
Provisions it is necessary to state that, ``if available from us, you 
may elect to receive these documents and changes electronically.''
    5. Section 6--FCIC proposes to amend section 6 by removing the 
percentage associated with the reporting requirements for sequentially 
thinning because the threshold for sequentially thinning is proposed to 
be removed from section 3.
    6. Section 8--FCIC proposes to amend section 8(d) by removing the 
minimum age requirements and adding a minimum level of production that 
must be obtained to qualify for insurance unless inspected and allowed 
by written agreement. This provision will protect program integrity 
because older trees that do not meet the minimum production requirement 
will no longer be insurable. Furthermore, this change will allow 
improved varieties that may come into production sooner to be insured 
regardless of age as long as they meet the minimum production 
requirement.
    FCIC proposes to add a new section 8(e) to allow certain varieties 
or groups of varieties to be designated as uninsurable through the 
Special Provisions. This change is being proposed to address varieties 
that may be found to be unproductive or incompatible pollinators.
    7. Section 13--FCIC proposes to amend section 13(b) by adding a 
statement indicating that if the insured is unable to provide separate 
acceptable records for any optional units, we will combine all units 
for which such records were not provided. FCIC also proposes adding a 
statement to this section stating that for any basic unit, we will 
allocate commingled production or revenue to each basic unit in 
proportion to our liability on the harvested acreage for each unit. 
This is standard language contained in most policies that allow 
optional units. These provisions are being proposed to clarify the 
consequences of failure to provide separate acceptable records.
    FCIC proposes to revise section 13(d)(2)(i) by changing the basis 
by which price is determined for sold production from market price to 
price

[[Page 71279]]

received. This change is being proposed to address concerns that the 
indemnity is not calculated on the same basis by which the guarantee is 
set. The guarantee is based on the price received for sold production, 
but indemnities are determined using the market price. FCIC also 
proposes adding a parenthetical stating that if the price received is 
not verifiable by sales receipts or is determined to be inappropriate 
for the quality of pecans sold, the market price will be used. FCIC 
intends to provide additional guidance in the 2013 Pecan Revenue Loss 
Adjustment Standards Handbook as to when a price should be considered 
inappropriate. The guidance will create a minimum threshold that the 
price received must meet and will be based on a percentage of the AMS 
price.
    FCIC proposes to revise the example at the end of section 13 by 
replacing dates with generic numbers for the crop year. FCIC also 
proposes to revise the example by changing the historical average 
pounds per acre and average gross sales per acre to reflect an 
alternate bearing pattern. FCIC further proposes to revise the example 
by adding insured causes of loss to the explanation of indemnity 
calculation to illustrate that claims are only paid if losses are the 
result of an insured cause. FCIC also proposes to change the example to 
illustrate that the price received will be used to value sold 
production.

List of Subjects in 7 CFR Part 457

    Crop insurance, Pecan revenue, 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 effective for 
the 2013 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(l), 1506(o).

    2. Amend Sec.  457.167 as follows:
    a. Amend the introductory text by removing ``2005'' and adding 
``2013'' in its place;
    b. Add definition in section 1 for ``transitional revenue (T-
revenue)'';
    c. Revise the definitions in section 1 of ``average gross sales per 
acre,'' ``approved average revenue per acre,'' and ``market price'';
    d. Amend section 1 by removing the definitions of ``enterprise 
unit'' and ``set out'';
    e. Revise section 2(a)(1);
    f. Amend section 2(a)(2) by removing the period at the end of the 
sentence and adding the term ``; or'' in its place;
    g. Add a new section 2(a)(3);
    h. Amend the introductory text of section 3 by adding a comma 
following the phrase ``In lieu of section 3 of the Basic Provisions'';
    i. Revise section 3(d)(1);
    j. Amend section 3(d)(2) by removing the phrase ``lowest available 
dollar span amount provided in the actuarial documents'' and adding the 
term ``T-revenue'' in its place;
    k. Amend section 3(f)(1) by removing the phrase ``lowest available 
dollar span provided in the actuarial table'' and adding the term ``T-
revenue'' in its place;
    l. Amend section 3(h) by adding a hyphen between the words ``high'' 
and ``risk'' in all four instances they appear;
    m. Revise section 4(b);
    n. Amend section 4(d) by adding the sentence, ``If available from 
us, you may elect to receive these documents and changes 
electronically.'' following the sentence, ``If changes are made that 
will be effective for a subsequent two-year coverage module, such 
copies will be provided not later than 30 days prior to the 
cancellation date.'';
    o. Revise sections 6(a)(1) and 6(b);
    p. Revise section 8(d);
    q. Amend section 8 by redesignating paragraphs (e) and (f) as (f) 
and (g) respectively, and adding a new paragraph (e);
    r. Revise section 13(b);
    s. Revise section 13(d)(2)(i);
    t. Revise the example at the end of section 13; and
    u. Amend section 16 by removing the space between ``Not'' and 
``withstanding.''
    The revised and added text reads as follows:


Sec.  457.167  Pecan revenue crop insurance provisions.

    The pecan revenue crop insurance provisions for the 2013 and 
succeeding crop years are as follows:
* * * * *
1. Definitions
* * * * *
    Average gross sales per acre. Your gross sales of pecans for a crop 
year divided by your net acres of pecans grown during that crop year. 
For example, if for the crop year, your gross sales were $100,000 and 
your net acres of pecans were 100, then your average gross sales per 
acre for the crop year would be $1,000.
    Approved average revenue per acre. The total of your average gross 
sales per acre based on at least the most recent consecutive four years 
of sales records building to six years and dividing that result by the 
number of years of average gross sales per acre. If you provide more 
than four years of sales records, they must be the most recent 
consecutive six years of sales records. If you do not provide at least 
four years of gross sales records, your approved average revenue will 
be:
    (1) The average of the two most recent consecutive years of your 
gross sales per acre and two years of the T-revenue; or
    (2) If you do not provide any gross sales records, the T-revenue.
* * * * *
    Market price. The market price is:
    (1) The average of the AMS prices for the nearest location for 
similar quality, quantity, and variety of in-shell pecans published 
during the week you sell any of your pecans if the price received is 
determined to be inappropriate, you harvest your pecans if they are not 
sold, or your pecans are appraised if you are not harvesting them, 
unless otherwise provided in the Special Provisions. For example, if 
you harvest production on November 14 but do not sell the production, 
the average of the AMS prices for the week containing November 14 will 
be used to determine the market price for the production harvested on 
November 14; or
    (2) If AMS prices are not published for the week, the average price 
per pound for in-shell pecans of the same variety or varieties insured 
offered by buyers on the day you sell any of your pecans if the price 
received is determined to be inappropriate, you harvest any of your 
pecans if they are not sold, or your pecans are appraised if you are 
not harvesting them, in the area in which you normally market the 
pecans (If buyers are not available in your immediate area, we will use 
the average in-shell price per pound offered by buyers nearest to your 
area).
* * * * *
    Transitional revenue (T-revenue). A value determined by FCIC and 
published in the actuarial documents.
* * * * *
2. Unit Division
    (a) * * *
    (1) An enterprise unit as defined in section 1 of the Basic 
Provisions, if allowed by the Special Provisions;
    (2) * * *
    (3) In lieu of the requirements contained in section 34(b) of the 
Basic Provisions, basic units may be divided into optional units if, 
for each optional unit, the following criteria are met:

[[Page 71280]]

    (i) Each optional unit you select must be located on non-contiguous 
land;
    (ii) Separate records of production are provided for at least the 
most recent consecutive two crop years. The records will be used to 
verify that trees from each unit meet the minimum production 
requirement contained in section 8(d) and to establish the approved 
average revenue per acre for the optional units selected; and
    (iii) Optional units are selected and identified on the acreage 
report by the acreage reporting date of the first year of the two-year 
coverage module (Units will be determined when the acreage is reported, 
but may be adjusted or combined to reflect the actual unit structure 
when adjusting a loss. No further unit division may be made after the 
acreage reporting date for any reason).
* * * * *
3. Insurance Guarantees and Coverage Levels for Determining Indemnities
* * * * *
    (d) * * *
    (1) You fail to provide acceptable records required for optional 
units, which will result in optional units being combined into basic 
units at the time of discovery and your amount of insurance per acre 
will be recalculated for the two-year coverage module.
* * * * *
4. Contract Changes
* * * * *
    (b) Any changes in policy provisions, amounts of insurance, premium 
rates, and program dates (except as allowed herein or as specified in 
section 3) can be viewed on RMA's Web site not later than the contract 
change date contained in these Crop Provisions. We may revise this 
information after the contract change date to correct clerical errors.
* * * * *
6. Report of Acreage
    (a) * * *
    (1) Any damage to trees, removal of trees, change in practices, 
sequential thinning or any other action that may reduce the gross sales 
below the approved average revenue upon which the amount of insurance 
per acre is based and the number of affected acres;
* * * * *
    (b) We will reduce the amount of your insurable acreage based on 
our estimate of the removal of a contiguous block of trees or damage to 
trees of the insured crop. We will reduce your amount of insurance per 
acre based on our estimate of the expected reduction in gross sales 
from a change in practice or sequential thinning.
* * * * *
8. Insured Crop
* * * * *
    (d) That are grown on trees that have produced at least 600 pounds 
of pecans in-shell per acre (or an amount provided in the Special 
Provisions) in at least one of the previous four crop years, unless we 
inspect and allow insurance by written agreement. This amount of 
production must be achieved subsequent to any top work that occurs 
within a unit;
    (e) That are grown on varieties or a grouping of varieties within a 
unit that are not designated as uninsurable in the Special Provisions;
* * * * *
13. Settlement of Claim
* * * * *
    (b) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable records for any:
    (1) Optional units, we will combine all optional units for which 
such records were not provided; or
    (2) Basic unit, we will allocate commingled production or revenue 
to each basic unit in proportion to our liability on the harvested 
acreage for each unit.
* * * * *
    (d) * * *
    (2) * * *
    (i) The dollar amount obtained by multiplying the number of pounds 
of pecans sold by the price received for each day the pecans were sold 
(if the price received is not verifiable by sales receipts or is 
determined to be inappropriate by us for the quality of pecans sold the 
market price will be used);
* * * * *

                                              Pecan Revenue Example
----------------------------------------------------------------------------------------------------------------
                                                                               Average pounds     Average gross
                           Year                                   Acres           per acre       sales per acre
----------------------------------------------------------------------------------------------------------------
4.........................................................               100               750            $1,050
3.........................................................               100               625               625
2.........................................................               100              1250               750
1.........................................................               100               200               250
                                                           -----------------------------------------------------
    Total Average Gross Sales Per Acre =..................  ................  ................             2,675
----------------------------------------------------------------------------------------------------------------

    The approved average revenue equals the total average gross sales 
per acre divided by the number of years ($2,675 / 4 = $669).
    The amount of insurance per acre equals the approved average 
revenue multiplied by the coverage level percent ($669 x .65 = $435).
    Assume pecan trees in the unit experienced damage to blooms due to 
a late freeze causing low production. You produced, harvested, and sold 
300 pounds per acre of pecans from 70 acres and received an actual 
price of $0.75 per pound. On the other 30 acres, the pecans suffered 
damage due to drought. You elected not to harvest the other 30 acres of 
pecans. The 30 acres were appraised at 100 pounds per acre and on the 
day of the appraisal the average AMS price was $0.65. The total dollar 
value of production to count is (300 pounds of pecans x $0.75 x 70 net 
acres) + (100 pounds x $0.65 x 30 net acres) = $15,750 + $1,950 = 
$17,700.
    The indemnity would be:
    The amount of insurance per acre multiplied by the net acres minus 
the dollar value of the total production to count equals the dollar 
amount of indemnity ($435 x 100 = $43,500.00 - $17,700.00 = $25,800).
* * * * *

    Signed in Washington, DC, on November 4, 2011.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2011-29217 Filed 11-16-11; 8:45 am]
BILLING CODE 3410-08-P