Common Crop Insurance Regulations; Forage Seed Crop Provisions, 53370-53374 [2013-20802]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 78, Number 168 (Thursday, August 29, 2013)]
[Proposed Rules]
[Pages 53370-53374]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20802]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket No. FCIC-13-0001]
RIN 0563-AC24


Common Crop Insurance Regulations; Forage Seed Crop Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to add 
a provision to its regulations that provides forage seed insurance. The 
provisions will be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions (Basic Provisions), which contain standard 
terms and conditions common to most crop programs. The intended effect 
of this action is to convert the Forage Seed pilot crop insurance 
program to a permanent insurance program for the 2015 and succeeding 
crop years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business September 30, 2013, 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-13-0001, by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Tim Hoffman, Director, Actuarial and Product Design 
Division, Risk Management Agency, United States Department of 
Agriculture, P.O. Box 419205, Kansas City, MO 64141-6205.
    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 submission. 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: Tim Hoffmann, Director, Product 
Administration and Standards Division, Risk Management Agency, United 
States Department of Agriculture, Beacon Facility, Stop 0812, Room 421, 
PO 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 not significant for the purpose of Executive Order 12866 and, 
therefore, it has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Pursuant to the 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.

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

[[Page 53371]]

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 the 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 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 and 7 CFR part 400, subpart J, 
for the informal review process of good farming practices, as 
applicable, must be exhausted before any action against FCIC may be 
brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC offered a pilot crop insurance program for forage seed 
beginning with the 2002 crop year. The pilot program was initially 
offered in 10 counties in California, Idaho, Montana, Nevada, Oregon, 
Washington and Wyoming. In the initial year, the program insured 104 
producers and approximately 11,000 acres. Following an evaluation of 
the Forage Seed pilot program in 2006, FCIC's Board of Director's 
approved continuation and expansion until such time the program could 
be made permanent. In 2007, program changes included 2 additional 
counties and changes in the dates of the insurance period for Montana 
and Wyoming. Currently the provisions insure only forage seed that is 
contracted or grown as certified forage seed. All of the forage seed 
covered under the pilot program is alfalfa seed. For the 2012 crop 
year, 179 policies were sold and approximately 23,900 acres insured. 
This proposed rule will add the forage seed program to the code of 
federal regulations.

List of Subjects in 7 CFR Part 457

    Crop Insurance, Forage Seed, 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 2015 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(o).

0
2. Section 457.174 is added to read as follows:


Sec.  457.174  Forage Seed crop insurance provisions.

    The forage seed crop provisions for the 2015 and succeeding crop 
years are as follows:
FCIC Policies: United States Department of Agriculture, Federal Crop 
Insurance Corporation
Forage Seed Crop Provisions
    1. Definitions.
    Actual value. The dollar value received, or that could be received, 
for the forage seed if the forage seed production is properly handled 
in accordance with the requirements in the forage seed contract or the 
applicable certifying agency's requirements.
    Adequate stand. A population of live plants that equals or exceeds 
the minimum required number of plants per square foot as shown in the 
actuarial documents.
    Amount of insurance. The amount obtained by multiplying the 
production guarantee per acre for each type and practice in the unit by 
the insured acreage of that type and practice, by the applicable base 
price, and by the percentage of base price you elected. The total of 
these results will be the amount of insurance for the unit.
    Base price. For seed under a forage seed contract, the price per 
pound (excluding any discounts or incentives that may apply) stated in 
the forage seed contract. For certified forage seed not under a forage 
seed contract, and for forage seed producers who are also forage seed 
companies, the price contained in the actuarial documents.

[[Page 53372]]

    Certification application. The form used to request certification 
of forage seed by the certifying agency.
    Certification standards. The standards and procedures of the 
certification agency to assure genetic purity and identity of the seed 
certified.
    Certified forage seed. Forage seed that meets the certification 
standards administered by a certifying agency at the time of harvest 
and that has been grown under a certification application accepted by 
the certifying agency on or before the acreage reporting date.
    Certifying agency. An agency authorized under the laws of a State, 
Territory, or possession, to officially certify seed, which has 
standards and procedures to assure the genetic purity and identity of 
the seed certified, and approves certification applications for the 
certified forage seed that meets the certification standards at time of 
harvest.
    Established stand. An adequate stand of live plants for crop years 
after the seed-to-seed year.
    Fall planted. Forage seed crop planted after May 31 of the previous 
crop year.
    Forage seed company. A business enterprise that possesses all 
licenses for marketing forage seed required by the state in which it is 
domiciled or operates, and which possesses facilities with enough 
storage and capacity to accept and process the insured crop timely.
    Forage seed contract. A written contract executed between the 
forage seed crop producer and a forage seed company containing, at a 
minimum:
    (a) The producer's commitment to plant, grow, and deliver the 
forage seed produced from such plants to the seed company;
    (b) The seed company's commitment to purchase all the production 
from a specified number of acres or the specified quantity of 
production stated in the contract; and
    (c) Either a fixed price per unit of the forage seed or a formula 
to determine the price per unit value of such seed. Any formula for 
establishing value must be specified in the written contract. If the 
formula uses a future price that is settled after the applicable 
acreage reporting date, then the base price contained in the actuarial 
documents will apply.
    Forage seed crop. Small seeded legume plants grown for seed (e.g., 
alfalfa, clovers, etc.) shown in the actuarial documents.
    Harvest. Removal of seed from the windrow or field.
    Pound. Sixteen (16) ounces avoirdupois.
    Price election. In lieu of the definition in section 1 of the Basic 
Provisions, the price election will be the base price and used for the 
purposes of determining premium and indemnity under the policy.
    Qualified seed testing laboratory. Laboratory qualified by the 
State to test the forage seed to determine whether it qualifies as 
certified forage seed.
    Seed-to-seed year. The calendar year in which planting occurs for 
spring planted forage seed and the subsequent calendar year for fall 
planted forage seed.
    Spring planted. Forage seed crop planted before June 1 of the 
current crop year.
    2. Unit Division.
    In lieu of the optional unit provisions in section 34 of the Basic 
Provisions, you may select optional units by forage seed contract or 
variety if permitted by the Special Provisions.
    3. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
    In addition to the requirements of section 3 of the Basic 
Provisions:
    (a) You may elect only one percentage of base price and one 
coverage level for each forage seed crop grown in the county and 
designated in the actuarial documents. If separate base prices are 
available by forage seed crop type, the percentage election of base 
price and coverage level you choose for each forage seed crop type must 
be the same. For example, if you choose 100 percent of the base price 
and 65 percent coverage level for a specific forage seed crop type, you 
must choose 100 percent of the base price and 65 percent coverage level 
for all the forage seed crop types.
    (b) For each unit, separate guarantees will be determined by forage 
seed crop type and practice.
    4. Contract Changes.
    In accordance with section 4 of the Basic Provisions, the contract 
change date is June 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:

California and Nevada October 31;
All Other States September 30.
    6. Report of Acreage.
    In addition to the requirements of section 6 of the Basic 
Provisions, you must submit to us a copy of your forage seed contract 
for your contracted forage seed acreage or, if not contracted, a copy 
of the accepted certification application for your certified seed 
acreage on or before the acreage reporting date. Failure to provide a 
copy of the forage seed contract or the certification application 
accepted by the certifying agency by the acreage reporting date will 
result in denial of liability and no indemnity due.
    7. Insured Crop.
    (a) In accordance with section 8 of the Basic Provisions, the crop 
insured will be all types and practices of each forage seed crop you 
elect to insure, that is grown in the county and for which a premium 
rate is provided by the actuarial documents:
    (1) In which you have a share; and
    (2) That is grown solely for harvest as:
    (i) Certified forage seed; or
    (ii) Seed grown under a forage seed contract executed on or before 
the acreage reporting date.
    (b) For contracted acreage of forage seed crops only, you will not 
be considered to have a share in the insured crop unless, under the 
terms of the forage seed contract, you are at risk of a financial loss 
at least equal to the amount of insurance on such acreage.
    (c) In addition to the crop and acreage listed as not insured in 
sections 8 and 9 of the Basic Provisions, we will not insure any forage 
seed crop that:
    (1) Is interplanted with another crop, unless otherwise specified 
in the Special Provisions;
    (2) Is planted into an established grass or legume;
    (3) Does not have an adequate stand at the beginning of the 
insurance period;
    (4) Exceeds the age limitations for the forage seed crop or type 
contained in the Special Provisions; or
    (5) Is utilized for any purpose during the crop year other than for 
seed production.
    (d) A forage seed producer who is also a forage seed company may 
establish an insurable interest if the following requirements are met:
    (1) The producer must comply with these Crop Provisions; and
    (2) All the forage seed grown by the forage seed company is 
enrolled with the appropriate certifying agency.
    8. Insurance Period.
    (a) Insurance attaches on acreage with an adequate stand on the 
later of the date we accept your application or the applicable date as 
follows, unless provided otherwise in the Special Provisions:
    (1) For fall planted seed-to-seed year and established stands of 
forage seed crops, coverage begins for each crop year on:
    (i) October 1 for counties in Idaho, Montana, Oregon, Washington, 
Wyoming and other states; and
    (ii) November 1 for counties in California and Nevada.

[[Page 53373]]

    (2) For spring planted seed-to-seed year stands of forage seed 
crops coverage begins:
    (i) May 1 for counties in California and Washington; and
    (ii) May 15 for counties in Idaho, Montana, Nevada, Oregon, Wyoming 
and other states.
    (b) The calendar dates for the end of the insurance period for 
counties in the following states are as follows unless otherwise 
provided in the Special Provisions:
    (1) California and Nevada October 31.
    (2) Idaho, Oregon, Montana, Washington, Wyoming and all other 
states September 30;
    9. Causes of Loss.
    (a) In accordance with the provisions of section 12 of the Basic 
Provisions, insurance is provided only against the following causes of 
loss that occur during the insurance period:
    (1) Adverse weather conditions;
    (2) Fire;
    (3) Insects and plant disease, but not damage due to insufficient 
or improper application of control measures;
    (4) Wildlife;
    (5) Earthquake;
    (6) Volcanic eruption; or
    (7) Failure of the irrigation water supply, if caused by a peril 
specified in sections 9(a)(1) through (6) that occurs during the 
insurance period.
    (b) In addition to the causes of loss excluded in section 12 of the 
Basic Provisions, we will not insure against damage or loss of 
production due to:
    (1) The crop not being timely harvested, unless such delay in 
harvesting is solely and directly caused by a cause of loss specified 
in sections 9(a)(1) through (6);
    (2) Insufficient supply of pollinators, as determined by us, unless 
lack of pollinators or pollination is solely and directly caused by a 
cause of loss specified in sections 9(a)(1) through (7);
    (3) Failure of the certification standard or forage seed company 
contract acceptance caused by failure to follow proper isolation 
requirements or inadequate weed control, as determined by us, unless 
such failure is solely and directly due to a cause of loss specified in 
sections 9(a)(1) through (6); or
    (4) Failure of the certification standard or forage seed contract 
acceptance due to failure to follow all other certification or contract 
requirements, as determined by us, unless such failure is solely and 
directly caused by a cause of loss specified in sections 9(a)(1) 
through (6).
    10. Settlement of Claim.
    (a) We will determine your loss on a unit basis. In the event you 
are unable to provide separate acceptable production records:
    (1) For any optional unit, we will combine all optional units for 
which such production records were not provided; or
    (2) For any basic unit, we will allocate any commingled production 
to such units in proportion to our liability on the harvested acreage 
for each unit.
    (b) In the event of loss or damage to your forage seed crop covered 
by this policy, we will settle your claim by:
    (1) Multiplying the insured acreage for each type and practice by 
the production guarantee;
    (2) Multiplying each result in section 10(b)(1) above by the price 
election;
    (3) Totaling the results in section 10(b)(2);
    (4) Multiplying the total production to count for each type and 
practice by the price election;
    (5) Totaling the results of each crop type in section 10(b)(4);
    (6) Subtracting the result in section 10(b)(5) from the result in 
section 10(b)(3); and
    (7) Multiplying the result in section 10(b)(6) by your share.
    (c) The total forage seed production to count (in pounds) from all 
insurable acreage on the unit will include:
    (1) All appraised production as follows:
    (i) Not less than the production guarantee per acre for acreage:
    (A) That is abandoned;
    (B) 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 production records that are 
acceptable to us.
    (ii) Production lost due to uninsured causes;
    (iii) Unharvested production; 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 
and if:
    (A) 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 harvested production or appraisals 
from the samples at the time harvest should have occurred. If you do 
not leave the required samples intact, or fail to provide sufficient 
care for the samples, our appraisals made prior to giving consent to 
put the acreage to another use will be used to determine the amount of 
production to count);
    (B) 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; and
    (2) All harvested production from the insurable acreage in 
accordance with section 10(e).
    (d) In addition to the provisions of section 15 of the Basic 
Provisions, we may determine the amount of production of any 
unharvested forage seed on the basis of our field appraisals conducted 
after the normal time of harvest for the area. If the acreage is later 
harvested, production records must be provided and if the harvested 
production exceeds the appraised production, the claim will be 
adjusted.
    (e) Production not meeting the minimum quality requirements 
contained in the forage seed contract or certifying agency's standards 
based on tests conducted by a qualified seed testing laboratory due to 
insurable causes will be reduced as follows:
    (1) Divide the actual value by the base price for the insured type; 
and
    (2) Multiply the result (not to exceed 1.0) by the number of pounds 
of such production.

    Example: You have a 100 percent share and 100 acres of forage 
seed in the unit, with a guarantee of 600 pounds per acre on 75 
acres of an established stand of forage seed and a guarantee of 300 
pounds per acre on 25 acres of a spring planted seed-to-seed year 
stand. All acreage is contracted with a base price of $1.20 per 
pound and you have selected 100 percent of the base price. Losses 
due to insured causes of loss have reduced production and quality 
and you only harvested 37,000 pounds of seed. A portion of the total 
production was of poor quality; 10,000 pounds of seed failed to 
achieve the contract minimum germination requirement; and the 
salvaged production was valued at $0.80 per pound. Your indemnity 
would be calculated as follows:
(1) 75 acres x 600 pounds = 45,000 pound guarantee
25 acres x 300 pounds = 7,500 pound guarantee;
(2) 45,000 pounds x $1.20 per pound price election = $54,000 value 
guarantee
7,500 pounds x $1.20 per pound price election = $9,000 value 
guarantee;
(3) $54,000 + $9,000 = $63,000 total value of the guarantee;
(4) 27,000 pounds met the contract quality requirements = 27,000 
pounds production to count
27,000 pounds x $1.20 per pound = $32,400 10,000 pounds x ($0.80 per 
pound/$1.20

[[Page 53374]]

per pound) = 6,667 pounds production to count
6,667 pounds x $1.20 per pound = $8,000;
(5) $32,400 + $8,000 = $40,400 total value of production to count;
(6) $63,000 - $40,400 = $22,600 loss; and
(7) $22,600 x 100% share = $22,600 indemnity payment.

    11. Late and Prevented Planting.
    The late and prevented planting provisions of the Basic Provisions 
are not applicable for forage seed.

    Signed in Washington, DC, on August 20, 2013.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2013-20802 Filed 8-28-13; 8:45 am]
BILLING CODE 3410-08-P