Common Crop Insurance Regulations; Sugar Beet Crop Insurance Provisions, 65627-65639 [2019-25844]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 84, Number 230 (Friday, November 29, 2019)]
[Rules and Regulations]
[Pages 65627-65639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-25844]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 84, No. 230 / Friday, November 29, 2019 / 
Rules and Regulations

[[Page 65627]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket ID FCIC-19-0005]
RIN 0563-AC63


Common Crop Insurance Regulations; Sugar Beet Crop Insurance 
Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule with request for comments.

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Common Crop Insurance Regulations, Sugar Beet Crop Insurance Provisions 
(Crop Provisions) and makes amendments to the final rule, with request 
for comment, published in the Federal Register on September 10, 2018, 
that updated existing policy provisions and definitions to better 
reflect current agricultural practices. This final rule is amended 
based on comments received and other issues identified since 
implementation of the previous final rule. The changes will be 
effective for the 2020 and succeeding crop years in states with a 
November 30 contract change date and for the 2021 and succeeding crop 
years in all other states.

DATES: This final rule is effective November 30, 2019. However, FCIC 
will accept written comments on this final rule until close of business 
January 28, 2020. FCIC will consider these comments and make changes to 
the rule if warranted.

ADDRESSES: We invite you to submit comments on this rule. In your 
comments, include the date, volume, and page number of this issue of 
the Federal Register, and the title of rule. You may submit comments by 
any of the following methods, although FCIC prefers that you submit 
comments electronically through the Federal eRulemaking Portal:
     Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FCIC-19-0005. Follow the 
online 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 and publicly available on https://www.regulations.gov.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received for any dockets by the name of the person submitting 
the comment (or signing the comment, if submitted on behalf of an 
association, business, labor union, etc.). Interested persons may 
review the complete User Notice and Privacy Notice for Regulations.gov 
at https://www.regulations.gov/#!privacyNotice.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; Product Administration 
and Standards Division, Risk Management Agency, United States 
Department of Agriculture, Beacon Facility, Stop 0812, Room 7829, P.O. 
Box 419205, Kansas City, MO 64141-6205, telephone (816) 926-7730; email 
[email protected].

SUPPLEMENTARY INFORMATION: 

Background

    This rule amends changes to the Common Crop Insurance Regulations, 
Sugar Beet Crop Insurance Provisions that were published by FCIC on 
September 10, 2018, as a notice of final rule with request for comment 
rulemaking in the Federal Register at 83 FR 45535-45539. The public was 
afforded 30 days to submit written comments and opinions.
    Comments were received from 15 commenters. The commenters included 
persons or entities from the following categories: Insurance company, 
insurance agent, farmer, financial, producer group, academic, trade 
association, and other. The public comments received regarding the 
final rule with request for comment and FCIC's responses to the 
comments are as follows:
    Comment: Commenter suggested revising the definition of ``Raw 
sugar'' to ``Percentage of raw sugar'' since that term is frequently 
used.
    ``Percentage of raw sugar--Quantity of sugar that has not been 
extracted from the sugar beet crop and is determined from analytical 
tests of samples performed by the processor or other accredited 
laboratories.''
    This revised definition clarifies how the percentage is determined 
and by whom, and includes the ability for alternative testing of 
samples by qualified facilities, which might be necessary in cases of 
unharvested appraisals where sampling and testing might not be readily 
performed by the processor.
    Response: FCIC is adding the following definition for percentage of 
raw sugar, ``quantity of sugar determined from analytical tests of 
samples performed by the processor or other laboratories approved by 
us.''
    Comment: A commenter stated that Section 1 is revising the 
definition of Practical to Replant and seems to strengthen the idea of 
only replanting when practical to replant and will be good for the 
growers.
    Another commenter stated that revising the definition of practical 
to replant to align with the practicality to replant and should be an 
improvement.
    Response: FCIC thanks the commenter and appreciates their input.
    Comment: Commenter stated that the definition of ``Initially 
planted'' can be deleted since the term is no longer used in the Sugar 
Beet CP (part of the ``Insurance Period'' details that have been 
removed in section 9).
    Response: FCIC is deleting the definition of initially planted.
    Comment: Commenter stated that definitions for ``Pound'' and 
``Ton'' should be added to align with other crop provisions that use 
pounds as the unit of measure, and tons. This also will function in 
conjunction with the proposed definition of ``Percentage of raw sugar'' 
(see under ``raw sugar'' below) and the production's unit of measure, 
as indicated in other suggestions/recommendations provided in this 
document.
     ``Pound--Sixteen ounces avoirdupois.''
     ``Ton--2,000 pounds.''
    Response: FCIC is adding the definition of pound and ton.
    Comment: Commenter stated the definition of ``Processor contract'' 
replacing the definition of ``sugar beet processor contract'' in the 
current Sugar

[[Page 65628]]

Beet CP, now begins: ``A written agreement between you and the 
processor, executed on or before the acreage reporting date, which is 
in effect for the crop year, containing at a minimum: . . .'' 
[highlighting indicates the changes from the ``sugar beet processor 
contract'' definition].
     As written, this could be misunderstood as having the 
phrase ``. . . which is in effect for the crop year . . .'' apply to 
the acreage reporting date rather than to the ``written agreement'' 
(processor contract). One way to make this clearer would be something 
like: ``. . . executed on or before the acreage reporting date and in 
effect for the crop year . . .''
     Also consider if this should use a term other than 
``written agreement'', which generally has a different meaning for crop 
insurance purposes, as in section 7(a)(4) and elsewhere. [One 
possibility: ``An agreement, in writing, between . . .'']
    Response: FCIC is replacing the definition and references to the 
term ``processor contract'' with the definition/term ``production 
agreement'' which removes the requirement for the contract to include a 
price or formula for a price based on third party data. This better 
reflects sugar beet contracts because there is no third party data 
source for prices and not all production agreements include a price.
    Comment: Commenter suggested revising the definition of ``Raw 
sugar'' to ``Percentage of raw sugar'' since that term is frequently 
used.
     ``Percentage of raw sugar--Quantity of sugar that has not 
been extracted from the sugar beet crop and is determined from 
analytical tests of samples performed by the processor or other 
accredited laboratories.''
     This revised definition clarifies how the percentage is 
determined and by whom, and includes the ability for alternative 
testing of samples by qualified facilities, which might be necessary in 
cases of unharvested appraisals where sampling and testing might not be 
readily performed by the processor.
    Response: FCIC is adding the definition for average percentage of 
raw sugar based on this comment to be the quantity of sugar determined 
from analytical tests of samples performed by the processor or other 
laboratories approved by the Approved Insurance Provider (AIP). FCIC is 
also revising section 13(d), to allow the average percentage of raw 
sugar to be determined by laboratories approved by the AIP, in addition 
to tests performed by the processor. Sections 13(d)(1) and 13(e)(1) 
will also clarify that raw sugar content tests may be based on the 
insured's previous tests performed by the processor or other 
laboratories approved by the AIP.
    Comment: A commenter stated that a change that is not in here, but 
should be, is an optional unit provision based on each individual 
processor contract per field. With each field being separately 
contracted, this is an easy change to make. Units based on section 
lines may make sense for dryland bulk commodity crops with a low per 
acre value but are not appropriate for a specialty crop like sugar 
beets which often have many smaller fields in the same section with 
each exposed to different risks due to their location in that unit.
    Another commenter stated that one change that the commenter has 
repeatedly requested but is not in here is an optional unit provision 
based on each individual processor contract per field. With each field 
being individually identified by its own contract number this should be 
easily implemented and should increase participation.
    Response: This issue has been reviewed extensively by FCIC. In the 
situation the commenter outlined, their processor contracts are by 
field, and they want insurance by field. This would allow a producer to 
separate their Actual Production History (APH) by field instead of 
having an average production for the unit. This could add complexity to 
the program and significantly increase the frequency of losses, which 
could require significant premium rate increases to maintain actuarial 
soundness. Further, processors, contractors, and grower groups have 
been asked to supply the data to show revenue increases and benefits to 
the program supporting this proposed unit structure. To date, nothing 
has been provided.
    Comment: Commenter stated that Insurance Providers have some 
concerns on how this change from ``standardized tons'' to ``pounds of 
raw sugar'' will affect the insureds' APH. The conversion from 
standardized tons to pounds of raw sugar is not clear at this time. 
Insureds will need to recertify their production history to align with 
the conversion from standardized tons to pounds of raw sugar.
    The commenter assumes calculations are as follows:
    Current procedure:
    Assume that 150 tons of beets harvested on 20 acres with a 14.5% 
sugar content.
    Sugar percentage is 17.2% in the special provisions.
    14.5% / 17.2% = .843 factor.
    150 tons * .843 factor = 126.4 tons.
    126.4 tons / 20 acres = 6.3 standardized tons/acre that gets 
reported for APH.
    Actual sugar content of beets would be:
    150 tons * 2,000 lbs. = 300,000 lbs. of beets.
    300,000 lbs. * 14.5% sugar = 43,500 lbs. of actual raw sugar in the 
beets.
    43,500 lbs./20 acres = 2,175 lbs./acre actual raw sugar per acre.
    Please clarify which of the following methods will be utilized for 
converting existing APH databases to pounds of raw sugar and note the 
difference in the APH conversion and the actual sugar content 
calculations in this example.
    1. (6.3 tons / acre APH * 2,000 lbs.) * 17.2% = 2,167.2 lbs. raw 
sugar/acre APH.
    Or convert total production for the 20 acres:
    2. 126.4 standardized tons * 2,000 lbs. = 252,800 lbs. of beets.
    252,800 lbs. * 17.2% sugar from the SP = 43,481.6 lbs. of raw 
sugar.
    43,481.6 lbs. of raw sugar / 20 acres = 2,174 lbs. APH.
    The example above is based on information included in the 
Evaluations and Recommended Improvements for the Sugar Beets Crop 
Insurance Program which was submitted by Watts and Associates, Inc.
    Plant Count Method Appraisals (Weight Method not applicable until 
the factory accepts sugar beets) completed prior to the processor 
accepting beets at the factory are not based on the percent of raw 
sugar present in the sugar beets at the time of the appraisal. Guidance 
is needed in the policy to convert appraised production based on the 
plant count method to ``pounds of raw sugar.''
    Response: The conversion is based on total production, thus example 
number 2 is the correct calculation. Additionally, FCIC has developed 
and released procedures and training materials for insurance companies 
detailing how to apply this conversion for insured producers including 
the Frequently Asked Questions at https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Sugar-Beet.
    Comment: A commenter stated that section 3 is changing standardized 
tons to pounds of raw sugar. It is unclear to the commenter how this 
calculation of pounds of raw sugar is made or how well it correlates to 
standardized tons.
    Another commenter stated the commenter broadly supports FCIC's 
proposal to change the basis of insurance from ``standardized tons'' to 
pounds of raw sugar, simplifying the program and better aligning it 
with commercial practice. The commenter

[[Page 65629]]

did raise a concern, however, regarding the implementation of this 
important change. The shift from standardized tons to pounds of raw 
sugar will be very visible to farmer-producers and could cause 
considerable confusion, particularly in its first year. Insurance 
coverage will look different. The mathematical relationship between a 
producer's ``old'' coverage and ``new'' coverage may be far from 
obvious at first. Even traditional price elections may be confusing 
when now stated in the terms of pounds versus tons, as growers, agents, 
and other stakeholders try to make comparisons with prior-year levels.
    To avoid this problem, the commenter believes a well-planned, well-
coordinated public outreach and education process will be essential, 
including outreach to farmers so they will understand the new system, 
training for agents so they can effectively explain it, training for 
AIP loss adjustors and underwriters to minimize mistakes, and the 
development of simple-to-use tools or applications allowing producers 
quickly and easily to compare prior coverage in ``standardized tons'' 
to their new coverage in raw sugar pounds.
    The commenter would be pleased to assist RMA in this process, be it 
in arranging outreach to the commenter's farmer members, getting 
producer feedback on training materials, developing Question-and-Answer 
sheets, providing farmer-level input for web-based applications, or in 
any other manner that might be helpful to the agency and the 
commenter's members.
    Response: FCIC has developed and released procedures and training 
materials for insurance companies detailing how to apply this 
conversion for insured producers including the Frequently Asked 
Questions at https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Sugar-Beet and the Sugar Beet Loss Adjustment Standards 
Handbook at https://www.rma.usda.gov/-/media/RMAweb/Handbooks/Loss-
Adjustment-Standards_-25000/Sugar-Beet/2019-25450-1H-Sugar-Beet-Loss-
Adjustment-Standards.ashx. The change in unit of measure from 
standardized tons to pounds of raw sugar was made to better align with 
the sugar industry in how producers are paid and for program 
consistency with sugarcane. Below is a comparison example of the new 
unit of measure (pounds of raw sugar), followed by previous unit of 
measure (standardized tons), and final example is converting 
standardized tons to pounds of raw sugar. The examples show the 
conversions and how the end guarantee should be the same or within a 
few pounds of their previous APH guarantee. The new APH calculation of 
taking net tons to pounds of raw sugar: (20 net paid tons * 2,000 lbs.) 
* 0.180 insured's average percent of raw sugar) = 7,200 pounds of raw 
sugar. The previous APH calculation of taking net tons to standardized 
tons: [20 net tons * (0.180 / 0.170)] = 21.2 standardized tons. The 
conversions from standardized tons to pounds of raw sugar is 
calculated: (21.2 standardized tons * 2,000 pounds) * 0.170 = 7,208 
pounds of raw sugar.
    Comment: Commenter stated in regard to Section 3; changing 
standardized tons to pounds of raw sugar. Commenter would like 
clarification of how this calculation will be made, and how well it 
will correlate to standardized tons. Also concerned as to how an 
unharvested portion of a field would be appraised for APH on a raw 
sugar basis.
    Another commenter is concerned as to how an unharvested portion of 
a field would be appraised for APH purposes on a raw sugar basis.
    Response: FCIC has developed and released procedures and training 
materials for insurance companies detailing how to apply this 
conversion for insured producers as well as how to appraise unharvested 
acreage.
    The change in unit of measure from standardized tons to pounds of 
raw sugar was made to better align with the sugar industry in how 
producers are paid and for program consistency with sugarcane. Below is 
a comparison example of the new unit of measure (pounds of raw sugar), 
followed by previous unit of measure (standardized tons), and final 
example is converting standardized tons to pounds of raw sugar. The 
examples show the conversions and how the end guarantee should be the 
same or within a few pounds of their previous APH guarantee. The new 
APH calculation of taking net tons to pounds of raw sugar: (20 net paid 
tons * 2,000 lbs.) * 0.180 insured's average percent of raw sugar) = 
7,200 pounds of raw sugar. The previous APH calculation of taking net 
tons to standardized tons: [20 net tons * (0.180 / 0.170)] = 21.2 
standardized tons. The conversions from standardized tons to pounds of 
raw sugar is calculated: (21.2 standardized tons * 2,000 pounds) * 
0.170 = 7,208 pounds of raw sugar. Additional examples of the 
conversion can be found in the Frequently Asked Questions at https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Sugar-Beet.
    Appraising unharvested production is located in the Sugar Beet Loss 
Adjustment Standards Handbook in PART 4 Appraisals. The appraisal 
worksheet instructions are located in Exhibit 3. This information can 
be found at https://www.rma.usda.gov/-/media/RMAweb/Handbooks/Loss-
Adjustment-Standards_-25000/Sugar-Beet/2019-25450-1H-Sugar-Beet-Loss-
Adjustment-Standards.ashx.
    Comment: A commenter requested to recognize that the loads from 
each day of early harvest must be calculated separately.
    As of now, RMA says it is going to convert databases using the 
sugar factor from the 2018 Special Provisions. This may be to the 
producer's benefit. The agent should have already adjusted the tons for 
percent sugar when they completed the production report. When you run 
the numbers, we have identified cases where the pounds of sugar 
production will be spot-on and other times when the pounds of sugar 
will increase for the producer from what would be if you multiplied 
tons by actual sugar.
    RMA has indicated that they will distribute a draft of the Special 
Provisions for 2019 for industry review.
    Response: FCIC is aware that each day of early harvest will have to 
be calculated separately. Whenever the conversion is done there are 
some instances where the production goes up slightly, some that stay 
the same, and some that go down slightly. The difference occurs because 
of rounding. The insured has the option to do the conversion of 
standardized tons to pounds of raw sugar, or they can recertify their 
previous years' production in pounds of raw sugar.
    Comment: The commenter stated that section 3 is also removing the 
stage guarantees. The commenter thinks this is a good thing for their 
growers.
    Another commenter is pleased to see the removal of stage guarantees 
in the new Sugar Beet Crop Insurance Provisions. Having played a lead 
role in urging RMA originally to institute a Sugar Beet Stage Guarantee 
Removal Pilot Program over a decade ago, the commenter believes the 
consistent high levels of participation in the program underscore the 
general acceptance of the concept by sugar beet producers. Sugar beets 
are one of the last major crops to see stage guarantees eliminated from 
their coverage, reflecting an updated underwriting approach, and the 
commenter views this as an important step forward for the program.
    Response: FCIC thanks the commenters and appreciates their input.

[[Page 65630]]

    Comment: Commenters stated in regard to 3(a): Consider deleting 
this subsection, which appears to be unnecessary.
     CCIP Basic Provisions section 3(b)(1)(iii) already states 
that the insured must select the same ``Percentage of the available 
price election . . .'' and ``. . . If different prices are provided by 
type or variety, . . . the same price percentage will apply to all 
types and varieties.''
     Also, should a separate and unique price election be 
offered for the certified organic practice, then defaulting to the 
Basic Provisions will ensure that there is no conflict with the crop 
provisions whereby more than one price election may be applicable, 
albeit each at the same percentage to the maximum price offered.
    Response: FCIC thanks the commenter and is deleting section 3(a).
    Comment: Commenter stated in regard to 3(b) [which would be re-
designated as section 3 if 3(a) is deleted]: Consider revising this to: 
``The unit of measure for production is pounds of raw sugar, determined 
by multiplying the quantity of sugar beets by the percentage of raw 
sugar.'' This clarifies the determination of ``pounds of raw sugar,'' 
regardless of whether the production amount pertains to the guarantee 
or appraisal/indemnity calculations.
    Response: FCIC is re-designating section 3(a) as section 3. 
Percentage of raw sugar is already defined and there is procedure in 
place referring to the calculations.
    Comment: Instead of ``reserving'' this section, commenter suggests 
using it to add the following language that is similar to other crop 
policies that require the insured crop to be grown under a processor 
contract, and will facilitate the insurance provider's timely 
determination of proper acreage and liability/coverage:
    ``Report of Acreage. In addition to the requirements of section 6 
of the Basic Provisions, you must provide a copy of all sugar beet 
processor contracts to us on or before the acreage reporting date.''
    For example: If a sugar beet contract pertains to 40 acres of sugar 
beets and the acreage report shows 41.2 acres planted, then the 
insurance provider has the proactive opportunity to verify with the 
sugar beet processor whether or not all production from the 41.2 acres 
of planted sugar beets will be accepted by the processor and if an 
amended contract is needed.
    Another commenter stated that the deleted phrase that is being 
moved to the ``processor contract'' definition states that the 
processor contract must be executed on or before the acreage reporting 
date. Please consider adding language requiring that the insured ``. . 
. must provide a copy of all processor contracts to us [the AIP] on or 
before the acreage reporting date . . .'' as in section 6 [Report of 
Acreage] in the Processing Tomato Crop Provisions [the rest of that 
reads: ``. . . in all counties, unless otherwise specified in the 
Special Provisions.''].
    Section 12(b) of the Sugar Beet CP requires the insured to ``. . . 
provide a copy of your processor contract, or corporate resolution if 
you are the processor'' as part of the insured's ``Duties In The Event 
of Damage or Loss'', but the Sugar Beet policy does not have such a 
requirement when there is not a claim.
    The requirement to provide a copy of the processor contract(s) 
whether or not there is a claim could be set up as in the Processing 
Tomato CP (and others), with the addition of section 6, Report of 
Acreage, since the current Sugar Beet section 6 is being removed.
    Response: FCIC has replaced the reserved section 6 with report of 
acreage detailing the requirement that the insured provide a copy of 
all production agreements.
    Comment: Commenter stated in regard to 7(a)(3): [Revised to replace 
``. . . a sugar beet processor contract executed before the acreage 
reporting date . . .'' with ``. . . a contract . . .'', with the 
deadline now included in the new definition of ``processor contract''.] 
Commenter Suggests ``. . . a processor contract . . .'' to match the 
definition and avoid any confusion with a crop insurance ``contract'' 
as defined in the Basic Provisions.
    Response: FCIC agrees and has replaced contract with production 
agreement in section 7(a)(3).
    Comment: Commenter stated in reference to 7(b)(4): [Ed.] Consider 
adding quotation marks around the word ``processor'', as done in 
7(b)(1).
    Response: FCIC revised by adding quotation marks around the word 
processor.
    Comment: A commenter requested that sugar beets that are planted in 
back to back years be insurable. The commenter stated that this would 
be most helpful for the commenter's farm in Imperial Valley, CA where 
the commenter's alternate crops to plant are limited.
    Another commenter is requesting sugar beets to be insurable back to 
back.
    Another commenter stated that they are writing to request the FCIC/
RMA consider allowing Sugar Beet fields to be insurable if grown on 
acreage that was planted in the most recent previous crop year. 
Currently in Imperial County, CA it is a common practice to grow Sugar 
Beets on the same field twice in consecutive years.
    The commenter stated that this is an industry standard, and the 
Sugar Processor allows this, and considers this a standard farming 
practice. All acreage farmed on a field in the first year, and on the 
following crop year are of the same quality and tonnage. Therefore, any 
acreage farmed on back to back fields should not be excluded from the 
Insurance policy.
    Another commenter stated to please allow for Sugar Beets to be 
insurable back to back years. The beet companies allow us to grow back 
to back because it is within proper plant health standards, and 
therefore we'd like to be able to be insured for each and every crop 
that is within reasonable health standards. If the beet company itself 
beliefs it's healthy and safe to grow back to back, the commenter is 
not sure why the insurance standards would be different.
    Another commenter stated that the commenter has been growing sugar 
beets in California for the last 40 years. In all of those years, it 
has been an accepted cultural practice to grow them in back to back 
years. The sugar companies that the commenter contracts with do not 
prohibit the commenter from that practice. The commenter sees no reason 
why the FCIC should deny the commenter's ability to obtain crop 
insurance on those fields that are planted back to back.
    Another commenter stated that they are requesting Sugar Beets to be 
insurable in back to back years. This is very important to the 
commenter's farming operations and planning. The commenter believes the 
request speaks for itself on why it is so important.
    Two commenters stated that they would like to see the option for 
Sugar Beets to be insurable for back to back years.
    Response: The Crop Provisions as written in sections 8(a)(1) and 
8(a)(3) do allow for back to back planting if it is specified in the 
Special Provisions for the county and if it is an allowable rotation 
outlined in the Special Provisions. These requests have been forwarded 
to the regional offices for review and further consideration. Other 
local or county-based concerns can be addressed to the RMA regional 
office. Any interested person may find contact information for the 
applicable regional office on RMA's website at https://www.rma.usda.gov/RMALocal/Field-Offices/Regional-Offices.
    Comment: The commenter stated that in regard to section 9(b) that 
they

[[Page 65631]]

approve of the deletion of this language in 9(b) that dealt with the 
end of insurance period for all units being when production delivered 
equals the amount of production stated in the contract. This language 
was unclear, difficult to administer and the commenter was unsure what 
exactly it accomplished.
    Another commenter stated that the commenter agrees with deleting 
the language currently in 9(b) stating that ``. . . the insurance 
period ends for all units when the production delivered to the 
processor equals the amount of production stated in the sugar beet 
processor contract.'' This language was difficult to administer and 
unclear as to what exactly it accomplished.
    Response: FCIC thanks the commenter and appreciates their input.
    Comment: The commenter is pleased to see the inclusion of 
provisions providing RMA with greater flexibility to update insurance 
dates and other factors. In particular, the commenter appreciates RMA's 
responsiveness in recent years to shifting the basis for calculating 
replant payments from a formula tied to annual price elections to a 
dollar amount based on actual costs--a process now formalized in the 
new policy. Such steps toward greater flexibility and responsiveness 
are always important and appreciated.
    Response: FCIC thanks the commenter and appreciates their input.
    Comment: The term ``final stage'' remains in the language. It 
should be removed. It should state ``at least 90 percent (90%) of the 
production guarantee . . .''
    Response: FCIC has removed the language ``final stage''.
    Comment: Commenter stated clarification is needed on how the 
appraisal would be calculated when being completed for a replant 
determination to know if the appraised production would exceed 90% of 
the insured's guarantee. Currently the calculation is based on tons 
with no conversion for pounds of raw sugar.
    Response: FCIC has updated the plant count appraisal method in the 
procedures to be calculated in pounds of raw sugar per acre.
    Comment: Commenter recommends the following edits be made to 13(d), 
to clarify and reference defined terms.
    ``Harvested production or unharvested production that is appraised 
after the earliest delivery date that the processor accepts harvested 
production and that meets the minimum acceptable standards contained in 
the processor contract or corporate resolution will be converted to 
pounds of raw sugar by multiplying the tons of such production by 2,000 
and by the average percentage of raw sugar to determine the production 
to count. The average percentage of raw sugar will be determined from 
tests performed at the time of crop delivery or sample acquisition 
(appraisal).
    (1) If individual tests of raw sugar content are not made at the 
time of delivery, the average percentage of raw sugar may be based on 
the results of previous tests performed by the processor during the 
crop year if it is determined that such results are representative of 
the total production.
    (2) If not representative, the average percentage of raw sugar will 
equal the raw sugar content percent shown in the actuarial documents.''
    Following the recommendation to recognize other institutions that 
may determine the `percentage of raw sugar', stating who performs the 
analytic tests is not necessary within this section since they are 
identified within the revised/recommended definition. `Unharvested' 
production as determined by an appraisal would not constitute crop 
delivery; thus clarification is added to specify the time frame 
associated with percentage of raw sugar determinations for samples 
obtained from field appraisals. This also keeps consistent usage of the 
term `percentage of raw sugar'. Recommend referring to the `actuarial 
documents' rather than the `Special Provisions' for where the county 
average percentage of raw sugar can be found.
    Response: FCIC revised to further clarify that the average 
percentage of raw sugar will be determined from tests performed by the 
processor or other laboratories approved by us (the AIP) at the time of 
crop delivery or sample acquisition (appraisal).
    FCIC further clarified that if individual tests of raw sugar 
content are not made at the time of delivery, the average percent of 
raw sugar may be based on the results of your (the insured's) previous 
tests.
    Comment: The provision notes that the raw sugar percentage will be 
included to the extent that a raw sugar test may not be performed or 
deemed unacceptable. Commenter would like to have the latter scenario 
more clearly clarified under the rules as well. It's not readily 
apparent to the commenter under what circumstances it would be ``deemed 
unacceptable'' nor is it clear the extent to which such a distinction 
could harm the commenter's production calculations in a given year. 
Please clarify what you mean.
    Response: FCIC thanks the commenter and appreciates their input. 
FCIC will not further define ``deemed unacceptable'' as this is not 
currently in the crop provisions.
    Comment: Commenter stated regarding section 13(d)(2), and in 
particular the phrase ``. . . the raw sugar content percent shown in 
the Special Provisions'', it will be imperative for RMA to review and 
update this parameter (as currently contained within the actuarial 
documents) for each and all sugar beet county programs. For some 
states, e.g., Idaho, Oregon, Washington (Pacific Northwest), Montana, 
North Dakota and Wyoming, their 2018 percent sugar values are 
established on a regional basis. A region-wide percent sugar better 
aligns each policyholder's determined standard tons with a single 
nation-wide price election. In contrast, other states, e.g., Minnesota, 
have variable county percent sugar values, which appear out of sync 
with their recent base period average. As the primary function of the 
`county average percent sugar' has changed from being a key component 
in adjusting to standard tons, to instead as a default value of `last 
resort', it is important for each county's percentage of raw sugar 
value to be current and reflective of the actual county instead of the 
region or district.
    Response: FCIC reviews the county average percentage sugar at 
regional level with data based on RMA history, sugar percentage data 
from the sugar beet processor, and NASS data. Regional Offices also 
consider APH and loss implications in order to ensure this percentage 
is actuarially sound. Additionally, FCIC only will use this percentage 
in total loss determinations.
    Comment: A commenter stated that in regard to section 13(d)(1) and 
13(e)(1): Both state based on previous tests performed by the processor 
during the crop year. The commenter questions if that is based on all 
beets delivered to processor from all producers (in the county or 
otherwise) or just from the producer in question. Although this 
language was in the previous provisions it still seems unclear what 
basis is to be used to ascertain the percent of raw sugar that should 
be used in these situations.
    Another commenter stated in regard to 13(d)(1) & (e)(1): These both 
include the statement ``. . . based on the results of previous tests 
performed by the processor during the crop year . . .'' It is unclear 
if that is based on all beets delivered to processor from all producers 
(in the county or otherwise) or just from the producer in question. 
Although this language was in the previous crop provisions, it still 
seems unclear what basis is to be used to

[[Page 65632]]

ascertain the percent of raw sugar that should be used in these 
situations.
    Response: FCIC is revising the Crop Provisions to specify that the 
previous tests are based on the previous tests from the insured 
producer.
    Comment: Commenter stated in regard to section 13, adding an early 
harvest adjustment, it appears to apply a penalty to the farmer when 
they are required by the processor to harvest a portion of a crop 
early, especially when damage has occurred from an insurable event. 
There is not clear enough guidance to insurance providers to have even 
application of these provisions, too much left to the discretion of the 
insurers could weaken coverage and participation.
    Another commenter stated that section 13 is adding an early harvest 
adjustment. This change seems to apply a penalty to the commenters' 
growers when the growers are required by the processor to harvest some 
beets early, especially when there is damage from an insurable loss. An 
argument can easily be made that this provision will provide less clear 
guidance to insurance providers rather than clearer guidance resulting 
in uneven application of the provisions. It seems this is a blatant 
attempt to limit the loss payments to growers.
    Another commenter stated in reference to 13(f)(3): It is unclear if 
the early harvest adjusted production should be limited to APH. If the 
producer is having a good year, he/she will not be happy with that. If 
part of the unit is early harvested, the early harvested acres could be 
capped at the APH of the remaining harvested acres. If all of the unit 
is early harvested, the sugar content from previous tests performed by 
the processor could be used. This may not include lost tonnage, 
however. Maybe capping at APH is ok.
    Another commenter stated that while ``early harvest factor'' allows 
producers to add a one-percent-per-day adjustment to their ``production 
to count'' for crops harvested prior to ``full maturity,'' it cannot 
result in an annual ``production to count'' in excess of the insured 
crop's current APH. The commenter suggests that this APH cap be removed 
or adjusted.
    The commenter's principal concern is that an APH cap fails to 
account for the fact that sugar beet yields, measured both in tonnage 
and sugar content, have been rising sharply in recent years due to 
adoption of new technologies, principally new bioengineered seeds and 
seed treatments. As a result, sugar beet APHs, which generally reflect 
a ten-year average of yields, often lag well behind current crop 
potentials. For instance, according to USDA's National Agricultural 
Statistical Service (NASS), over the past dozen years, sugar beet 
yields have grown (a) from a national average 25.5 to 32.8 tons per 
acre of beets and (b) from 3.79 to 4.87 tons per acre of actual sugar, 
increases of over 28 percent overall and of over 2.3 percent per year. 
In some regions, the growth has been even sharper.

                  National Growth in Sugar Beet Yields
------------------------------------------------------------------------
                           Yield per harvested      Sugar per harvested
       Crop year                acre/tons                acre/tons
------------------------------------------------------------------------
         2007/2008                     25.5                    3.79
         2008/2009                     26.8                    4.15
         2009/2010                     25.9                    3.98
         2010/2011                     27.7                    4.03
         2011/2012                     23.8                    4.04
         2012/2013                     29.3                    4.22
         2013/2014                     28.4                    4.15
         2014/2015                     27.3                    4.27
         2015/2016                     30.9                    4.47
         2016/2017                     32.8                    4.53
         2017/2018                     31.7                    4.71
         2018/2019                     32.8                    4.87
------------------------------------------------------------------------
Source: NASS, data as of 9/17/2018.

    This lag in APHs behind production trends has been recognized by 
FCIC though its approval of the privately-developed Trend-Adjusted APH 
Yield program for a number of crops.
    Capping the impact of an early harvest adjustment at a farmer's 
current APH thus creates an unintended penalty. It creates a ceiling 
below a crop's actual potential, and it hinders the ability of a 
farmers yield history to catch up with rising yield trendlines. In 
regions where early-harvest has occurred over the years without the 
benefit of an early-harvest factor, this lag of APHs behind current 
trendlines is especially pronounced. Given that the one-percent-per-day 
formula itself is based on sound underwriting data reflecting real-
world experience, the commenter suggests either eliminating the APH cap 
entirely as unneeded or adjusting it to a more reasonable level of 125 
percent of APH.
    Another commenter stated that Insurance Providers have concerns 
about capping the production after the early harvest adjustment is 
applied to the APH. Capping the production would not allow the insured 
to capture the true production potential of the crop given the new seed 
technology that has become available. Some APH databases still have 
conventional seed use included when now Roundup Ready seed is the 
primary use.
    Response: The rule added an early harvest adjustment in response to 
sugar beet processors requesting a portion of contracted acres be 
harvested early. Early harvested beets are often lower in weight and 
sugar content, resulting in what could appear to be a production loss 
that would lower the producer's future Actual Production History (APH). 
A solution was requested to prevent an early harvest from reducing a 
producer's future guarantee. The rule added an early harvest 
adjustment, which increases the producer's yield(s) on their early 
harvested acreage for that year's harvest, preventing a decline in the 
producer's future insurable yield due to early harvest. However, the 
early harvest adjustment was limited to not exceed the unit's approved 
APH. Additionally, FCIC had developed and released procedures detailing 
guidance for applying the early harvest adjustment including the 
Frequently Asked Questions at https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Sugar-Beet and the Sugar Beet Loss 
Adjustment Handbook at https://www.rma.usda.gov/-/media/RMAweb/Handbooks/Loss-Adjustment-Standards-25000/Sugar-Beet/2019-25450-1H-Sugar-Beet-Loss-Adjustment-Standards.ashx.
    After further analysis, FCIC determined that due to upward trending 
yields, the maximum adjustment could be overly punitive. Therefore, 
FCIC is revising the limit for the early harvest adjustment to not 
result in a yield greater than the higher of the producer's approved 
APH yield or the actual yield of the sugar beets harvested after full 
maturity from the unit. This change will better reflect the unit's 
production capabilities, especially in instances of a bumper crop 
because it uses the actual yield from the unit if that yield is higher 
than the approved APH yield.
    Comment: A commenter stated that in reference to 13(f)(3): This 
provision indicates that the early dig adjustment cannot result in 
production to count in excess of the insured's actual production 
history. Should ``actual production history'' be replaced by ``approved 
yield'' as this is the defined term found in the CCIP Basic Provisions 
as well as the basis for establishing coverage under this policy? Also, 
what happens if you have a scenario where this occurs? Do you not use 
the early dig adjustment at all or do you limit the production to count 
to the approved yield? The commenter would recommend that this 
provision be further clarified so that there is no misunderstanding for 
how this should be handled when this situation occurs.
    Response: FCIC is revising the limit for the early harvest 
adjustment to not result in a yield greater than the higher of the 
producer's approved APH yield or

[[Page 65633]]

the actual yield of the sugar beets harvested after full maturity from 
the unit. This change will better reflect the unit's production 
capabilities, especially in instances of a bumper crop because it uses 
the actual yield from the unit if that yield is higher than the 
approved APH yield. Regarding the scenario the commenter outlined, the 
adjustment will still be made, but it will be limited to the higher of 
the approved actual production history yield or the actual yield of the 
sugar beets harvest after full maturity from the unit.
    Comment: Is this `capping' clause referring to the insured's actual 
yield of ``full maturity'' beets for the current crop year or the 
highest value within the insured's APH database history?
    Response: The ``capping clause'' refers to the insured's approved 
actual production history yield, but after further analysis, FCIC 
determined that due to upward trending yields, the maximum adjustment 
could be overly punitive. Therefore, FCIC is revising the limit for the 
early harvest adjustment to not result in a yield greater than the 
higher of the producer's approved APH yield or the actual yield of the 
sugar beets harvested after full maturity from the unit. This change 
will better reflect the unit's production capabilities, especially in 
instances of a bumper crop because it uses the actual yield from the 
unit if that yield is higher than the approved APH yield.
    Comment: The commenter stated on 13(f) that the Risk Management 
Agency (RMA) has proposed adding an early dig factor to increase the 
production to count for both claims and APH purposes once a certain 
threshold has been reached as indicated in the actuarial documents. The 
commenter does agree that this type of production adjustment is needed 
for sugar beets when the crop is harvested early. It would be 
beneficial for everyone reviewing these provisions to know what these 
thresholds are as a part of this published rule so that the commenter 
would be able to review and comment on the proposed threshold as a part 
of these comments.
    Another commenter stated in regard to 13(f), RMA has proposed 
adding an early dig factor to increase the production to count for both 
claims and APH purposes once a certain threshold has been reached as 
indicated in the actuarial documents. Commenter agrees that this type 
of production adjustment is needed for sugar beets when the crop is 
harvested early. It would be beneficial for everyone reviewing these 
provisions to know what these thresholds are as a part of this 
published rule so that we would be able to review and comment on the 
proposed threshold as a part of these comments. It would also be 
helpful to know what the proposed calendar dates for the end of the 
insurance period for the different states are in order to be able to 
adequately comment on the full maturity date derived using the 45-day 
period used for the early dig factor.
    Response: FCIC thanks the commenter and appreciates their input. 
The threshold and calendar dates for the end of insurance period have 
been made publicly available in the actuarial documents. FCIC does not 
produce actuarial documents as part of the rule making process and 
therefore did not provide the threshold or calendar dates for the end 
of insurance period in the rule. These requests have been forwarded to 
the regional offices for review and further consideration. Other local 
or county-based concerns can be addressed to the RMA regional office. 
Any interested person may find contact information for the applicable 
regional office on RMA's website at https://www.rma.usda.gov/RMALocal/Field-Offices/Regional-Offices.
    Comment: The commenter stated as framed in the new Crop Insurance 
Provisions, the ``early harvest factor'' adjustment will apply only if 
the percentage of insured acreage harvested before full maturity 
exceeds a threshold level specified in the FCICs annual actuarial 
documents. The concern behind this provision, as the commenter 
understands it, is that applying the factor to very small fractions of 
a field could complicate its implementation, raising costs. The 
commenter appreciates RMA's decision to place the actual threshold 
level in its actuarial documents--rather than freezing it in policy 
terms--since this will make it easier to adjust in the future as 
experience is gained over time.
    If a threshold is to be imposed, however, the commenter believes it 
must be set initially at a level that reflects farm-level realities. 
The commenter discussed this issue with members from various regions of 
the country and found that early harvest practices vary widely. For 
instance, some processors that require early harvest deliveries will 
spread the burden among large numbers of members to minimize the impact 
on each one. This could result in early harvests quotas of, say, 10 
percent or so on each farm. In other situations, growers will be 
encouraged to harvest ``openings'' or small portions of fields during 
the early harvest. In other cases, early harvest can include entire 
fields or larger portions. In addition, the commenter understands that 
much of this data burden for implementing the new process will rest on 
sugar beet processing companies who record deliveries on a regular 
basis, and that crop insurance industry professionals, including agents 
and AIP staff, generally have access to automated systems to facilitate 
reporting.
    Given these factors, particularly the wide range of farming 
practices, the commenter urges RMA initially to set the threshold at a 
relatively low level, 5 percent. This would allow RMA, AIPs, 
processors, and producers to gain experience on how the early harvest 
adjustment operates in a wide range of conditions. The commenter also 
urges RMA to review its experience after the first two years to see if 
any adjustment in the threshold is justified.
    Another commenter stated in regard to 13(f), commenter agrees with 
the changes allowed when harvesting prior to full maturity. However, 
due to the workload involved when a small acreage is involved or a 
small fraction of a unit, consider establishing the percentage of the 
unit entered in the Special Provisions to be more than 25% and maybe up 
to 50% of unit acreage before this increase factor would be allowed.
    Since most of the time the early harvested acreage is minimal with 
only end rows or point rows harvested early, the overall impact to the 
production to count is minimal in relation to the whole unit (and to 
the extra work involved to adjust each load by each date). However, 
when the acreage exceeds 25% of the unit it starts to become relevant, 
and as the acreage approaches 50% it can become very significant. 
Perhaps 33% of a unit's acreage would be a good place to begin 
increasing production. If so, suggest that if more than one-third of 
the unit's acreage is harvested prior to full maturity, then the 
production from those acres could be increased; if less than one-third 
was harvested early, no adjustment would be allowed.
    Another commenter stated in regard to 13(f), going with a 
percentage of acreage before applying an early harvest adjustment might 
be a good idea in theory, but when a notice of claim is submitted in 
the middle or after harvest, there really is no way to determine the 
acres harvested early, other than taking the farmer's word for it. 
Early harvest tickets will reflect the tons per truckload and the date, 
but there is no way to ascertain early harvested acreage.
    Another commenter stated that clarification is needed on how to 
track the early harvested acres. The current settlement and summary 
sheets available do not show the individual loads with the delivery 
dates. The actual

[[Page 65634]]

weight tickets would have to be requested. These receipts are prone to 
fading, are misplaced during harvest, and can be difficult to read. 
Additional time may be needed by the processors to allow them to 
include the additional information needed to the settlement and summary 
sheets.
    Another commenter stated regarding the reference in (f) to ``. . . 
exceeds the threshold specified in the actuarial documents . . .'' and 
the language in (f)(1) & (3): What is the tentative/proposed threshold 
amount which is to be specified in the actuarial documents? Is it to be 
a percentage of the unit's total planted acreage, or a percentage of 
the unit's total insured acreage, i.e., planted and prevented planted? 
And what will the percentage be: 5%, 10%, or something else?
    Another commenter stated that in reference to section 13(f) that 
the commenter agrees with the changes allowed when harvesting prior to 
full maturity. However due to the workload involved (agents, insured's, 
AIP's) when dealing with small acreages or small fractions of a unit, 
the commenter would like to see the percentage of the unit entered in 
the Special Provisions to be more than 25% and maybe up to 50% of unit 
acreage before this increase factor would be implemented. Since most of 
the time the early harvested acreage is minimal with only end rows or 
point rows harvested early, the overall impact to the production to 
count is minimal in relation to the whole unit (and to the extra work 
involved to adjust each load by each date). However, when the acreage 
exceeds 25% of the unit, it starts to become relevant. As the acreage 
approaches 50% it can become very significant. Perhaps 33% (one third) 
of a unit's acreage would be a good place to begin increasing 
production. So, a suggestion the commenter has is, if more than one 
third of the unit acreage is harvested prior to full maturity, then 
production from those acres could be increased using the factor 
provided. If less than \1/3\ of a unit's acreage was harvested early, 
no adjustment would be allowed.
    Response: FCIC thanks the commenters and appreciates their input. 
The threshold was initially set low (at 10 percent), as suggested by 
one of the commenters. FCIC will continually monitor this threshold and 
update as needed. Additionally, the amount of production harvested 
early will be determined from processor production records obtained by 
the insured. It is the insureds' responsibility to provide acceptable 
production records to the AIP.
    Comment: The commenter stated in 13(f)(1): That the commenter 
predicated on what the commenter believes the calendar date for the end 
of insurance period will be based on prior years. The commenter does 
not believe that 45 days prior to the end of the insurance period for 
the date of full maturity is accurate for all areas where sugar beets 
are grown. The commenter suggests that 30 days prior to the end of the 
insurance period would be more appropriate in Colorado, Nebraska and 
Wyoming. Using 45 days in these states would result in a September 16 
full maturity date. The beets will continue to mature past this date 
and sugar content increases dramatically after a hard freeze. The 
average frost date for western Nebraska is September 20 and probably a 
few days later in Colorado. Using 30 days prior to the end of the 
insurance period date would be October 1. Early harvest started on 
September 5 this year. An 11% production adjustment (1% per day from 
harvest beginning to September 16) would not make this production whole 
by the full maturity date. This could also be an issue for Idaho as the 
local sugar beet company in this region requires some growers to start 
digging early to help get the factories up and running, which usually 
begins after September 1. Most growers finish harvest by October 31st 
and there is a penalty by the local sugar beet company if they harvest 
beets after November 5th. The commenter would recommend that RMA 
further review the full maturity dates for each state and consider 
increasing the production by 2% per day (rather than 1% per day) if the 
producer digs early, which would be similar to the factor used in the 
potato policy.
    Another commenter stated that regarding the interaction between 
section 9 calendar date of the end of insurance (EOI) and the early 
harvest dates derived according to 13(f)(1), please refer to the 
attached Excel file for detailed information. The `NASS harvest dates' 
tab tallies the beginning, most active, and ending harvest dates for 
each state, and are representative of the 2009-time period. The `4 
state progress' tab tallies the NASS weekly harvest progress reports 
from the four major sugar beet states, representing each state's 
average percent harvested during crop years 2012 through 2016; these 
dates and percentages corroborate the harvest dates for the 2009-time 
period remain applicable to current years' activities.
    If the November 15 calendar EOI date is to remain unchanged (for 
2019) then the 45-day default works quite well in capturing the `early 
harvest' phase for the states of Minnesota and North Dakota. However, 
for the other states (not withstanding California) the 45-day default 
significantly misses `early harvest' activities in states like Idaho 
and Michigan. <>
    If the calendar EOI dates are re-established for 2019, and if 
October 31 is used for Minnesota and North Dakota, then a 35-day time 
window may be more appropriate for these two states. If a November 10 
EOI were established for Idaho, Michigan and Colorado, then a 35-day 
window would seem to function reasonably as well.
    Additional challenges are foreseen for the states of Oregon, 
Montana, Nebraska, and Wyoming. Their `Beginning to Active Beginning' 
harvest phases are relatively short in duration and could represent 
minimal if any harvest before full maturity based on the county's 
location or district differences (e.g., Wyoming's Big Horn Basin versus 
its Southeast region).
    Without knowing what EOI dates are changing for 2019, and which 
counties will have variance to the 45-day default, it is essentially 
impossible to properly evaluate these interacting policy components.
    Another commenter stated there also are concerns about how to 
determine the early dig factor. The policy changes do not address the 
definition or date for early harvest. The definition and date could be 
different based on location. This may have to be addressed in the 
county special provisions. Early harvest is mandatory per the processor 
contract and not voluntary. The insured can choose which acres to 
harvest during early dig.
    Another commenter stated that depending on what the calendar date 
for the end of insurance period will be, commenter questions if 45 days 
prior to the end of the insurance period for the date of full maturity 
is accurate for all areas where sugar beets are grown. Commenter would 
recommend that RMA further review the full maturity dates for each 
state and consider increasing the production by 2% per day (rather than 
1% per day) if the producer digs early, which would be similar to the 
factor used in the potato policy.
    As an example, in Colorado, Nebraska, and Wyoming, with an EOI of 
11/15, the language in section 13(f) might be ok. That is 1% per day 
starting with 10/1. That means a producer would get 25% for beets 
harvested on September 5, the beginning of early harvest. Also, 
subsection 13(f)(1) allows for a number of days prior to EOI other

[[Page 65635]]

than 45. It states ``unless otherwise specified in the SP.''
    Another commenter stated, as this whole subsection is new procedure 
for the crop, what are the proposed variances that will be noted in the 
Special Provisions? Which states and counties? Can the number of days 
be less than or greater than the default of 45 days?
    Another commenter stated regarding the slated change to remove the 
calendar date for the EOI period from section 9 and display that 
information solely within the actuarial documents (AIB Date Table), 
this has significant impacts particularly with respect to the new 
element within section 13(f), i.e., early harvest production 
adjustments. Are there to be revisions to the EOI date for select 
regions? Notwithstanding California's Imperial County, essentially all 
remaining states or regions with active sugar beet processing 
facilities have a November 15th date as their EOI date. Comparing this 
November 15 date with the most current NASS `Usual Planting and 
Harvesting dates' for sugar beets [October 2010] suggests significant 
adjustments are warranted for the calendar EOI dates. Example: 
Minnesota and North Dakota typically conclude harvest during the last 
week of October; this constitutes approximately three weeks of extended 
coverage after harvest is routinely complete.
    The final rule notes the administrative advantages to establishing 
and displaying the calendar EOI date within the actuarial documents, 
but without being informed of what date changes are to be made for 2019 
it is impossible for policyholders and insurance providers to evaluate 
the impact on potential early harvest adjustments.
    Response: The Crop Provisions as written in section 13(f)(1) states 
that the Special Provisions can specify exceptions for the 45 days 
prior to the calendar date for the end of insurance provision. These 
requests have been forwarded to the regional offices for review and 
further consideration. Other local or county-based concerns can be 
addressed to the RMA regional office. Any interested person may find 
contact information for the applicable regional office on RMA's website 
at https://www.rma.usda.gov/RMALocal/Field-Offices/Regional-Offices.
    Additionally, FCIC set the increasing production rate to 1% per day 
by gathering data from multiples stakeholders and continues to collect 
more data from implementation of the Crop Provisions.
    Comment: The commenter appreciates RMA's intent that the early 
harvest adjustment not apply where a grower experiences actual damage 
resulting in a claim from rain, flood, drought, freeze, or some other 
covered hazard. Hence, the provision specifies that ``an adjustment 
will not be made if the sugar beets are damaged by an insurance cause 
of loss and leaving the crop in the field would reduce production.'' 
The inclusion of that final clause--``leaving the crop in the field 
would reduce production''--raises a question, however, whether the 
factor might inadvertently limit or annul a producer's legitimate 
insurance claim in some cases.
    For instance, one serious problem faced by sugar beet producers is 
root rot, a condition caused by excess moisture. Root rot not only 
damages beets in the field, but also continues to damage surrounding 
beets after they are delivered to a processor. As a result, these beets 
cannot be effectively stored for extended periods, and processors often 
ask that they be delivered early to avoid later problems. Nevertheless, 
if left in the field, beets affected by root rot do not necessarily 
continue to deteriorate and may bounce back to some extent.
    If a field is affected by root rot early in the growing season, 
reducing yields below the crop's insurance guarantee, and the crop is 
subsequently delivered early because of a requirement of the processor, 
it appears the early harvest adjustment could reduce the size of a 
farmers claim, or potentially raise ``production to count'' above the 
deductible. Similarly, the existence of the factor could act as a 
disincentive for growers to deliver the affected beets early, creating 
damage during storage. Clarification of the provision is needed to 
avoid such unintended results.
    Response: FCIC will not further specify the causes of loss in the 
crop provisions as specifying the causes of loss could have unintended 
consequences since impacts could differ by region and event. Loss 
adjusters will determine, on a case-by-case basis, the insurable cause 
of loss and if the early harvest adjustment is to be applied. FCIC is 
aware that there may be some disagreements between AIPs and the insured 
or inconsistencies between AIPs. Controversial claims procedure is 
already in place if an insured does not agree with the AIP's final loss 
adjustment determination. This procedure allows the claim to be 
referred from the loss adjuster to the AIP in order to resolve the 
claim, when the insured disagrees with the loss adjuster. Additionally, 
the Common Crop Insurance Policy, Basic Provisions provides a process 
for insureds and AIPs to settle disputes, including disputes with loss 
adjustment determinations, such as mediation and arbitration.
    Additionally, depending on situations that develop around harvest 
time, bulletins may be issued to address specific situations that 
arise. FCIC will continue to monitor the performance of this provision 
and can address additional program changes that may be needed in future 
crop provision and procedural revisions.
    Comment: Commenter stated in reference to 13(f)(3): Change the 
semicolon at the end to a period.
    Response: FCIC changed the semicolon at the end of the section to a 
period.
    Comment: Commenter stated about 13(e): Much more has changed in 
this section than just the correction to show raw sugar instead of 
standardized tons.
    This paragraph is for production that did not meet the 
specifications in the contract and was damaged by an insured cause of 
loss. The production will be based on the tons delivered times the 
average sugar. Any damage should result in lower tons and/or sugar. 
Since the production did not meet the terms of the contract, presumably 
the processor will not accept it. Therefore, there should be a way to 
put a salvage value on it. (The LMP definition has been removed.)
    If the production is damaged by an uninsured cause of loss, then it 
is presumed that an appraisal for uninsured causes would be done for 
unharvested production and a determination would be made for harvested 
production. See section 13(c)(1)(ii).
    The instructions for appraising sugar beets for replant 
qualifications (Exhibit 7 in the LASH) appear to be adequate. Nothing 
should change here except APH will now be expressed in pounds of raw 
sugar instead of tons. The calculation was APH/Plant population (for 1/
100 of an acre). The appraisal then multiplied this by the remaining 
population and compared it to 90% of the APH x coverage level. (One 
could actually take APH out of this equation and it would still be 
valid.)
    Another commenter stated in regards to 13(e)(1): The way this 
currently reads, if due to an insurable cause of loss the beets will 
not meet the minimum acceptable standards in the processor contract, 
then the AIP would count ALL of the production (``by multiplying the 
tons of such damaged beets by 2000 and by the average percent of raw 
sugar . . .''). That does not seem to be fair to an insured. If the 
beets are damaged to the point that the processor will not accept them 
and the beets are destroyed,

[[Page 65636]]

then there should be no production to count. Additionally, the wording 
in the previous sugar beet policy contained what might be called a 
``salvage value'' in that, if such damaged beets could not meet the 
terms of the processor contract, but did have some value, then that 
value should be used by converting it back to production to count.
    Recommend retaining this ``salvage value'' language, although 
reworded slightly to accommodate the change from standardized tons to 
pounds of raw sugar. Also revise the language to reflect zero 
production to count in situations where it does not meet the standards 
and is destroyed.
    Additionally, the 2018 Sugar Beet Loss Adjustment Standards 
Handbook has several examples of these types of situations and those 
examples should also be retained (with changes to pounds of raw sugar).
    Another commenter believes the language needs to be adjusted to 
reflect zero production to count in situations where it does not meet 
the standards and is destroyed. Additionally, the 2018 Sugar Beet Loss 
Adjustment Standards Handbook has several examples of these types of 
situations and those examples should also be retained (with changes to 
pounds of raw sugar).
    Another commenter stated that in regard to section 13(e): Much more 
has changed in this section than just the correction to show raw sugar 
instead of standardized tons, as summarized in the regulations. The way 
this currently reads, if due to an insurable cause of loss the beets 
will not meet the minimum acceptable standards in the processor 
contract then the insurance provider would still count ALL of them (by 
multiplying the tons of such damaged beets by 2000 and by the average 
percent of raw sugar). That does not seem to be fair to an insured. If 
the beets are damaged so that the processor will not accept and the 
beets are destroyed, then there should be no production to count.
    Another commenter stated that the wording in the previous sugar 
beet policy contained what the commenter might call a salvage value in 
that, if such damaged beets could not meet the terms of the processor 
contract but did have some value--then that value should be used by 
converting it back to production to count. The commenter believes this 
salvage value language should remain although reworded slightly to 
accommodate the change from standardized tons to pounds of raw sugar.
    Response: Section 13(e) is to address sugar beets that are damaged 
but are still accepted by the processor. FCIC agrees that the salvage 
value language should be maintained in the crop provisions and is 
adding language back into the provisions as outlined in 13(g) to 
provide that if harvested production is damaged due to an insurable 
cause of loss and is rejected by the processor, but is sold to a 
salvage buyer at a reduced price: Compute the pounds of raw sugar of 
the sold production by dividing the gross dollar amount paid by the 
salvage buyer by the established price.
    FCIC is also adding the following language in section 13(h) to 
address the zero production to count scenarios, providing that if 
production is damaged due to an insurable cause of loss to the extent 
that the processor will not accept the production, such as the 
production did not meet the standards contained in the production 
agreement; and there are no salvage markets for the production, then 
there would be no value for production and there would be no production 
to count provided the production is destroyed in a manner acceptable to 
us.
    Additionally, salvage value and zero production to count language 
has been maintained in the Sugar Beet Loss Adjustment Standards 
Handbook to address both situations at https://www.rma.usda.gov/-/
media/RMAweb/Handbooks/Loss-Adjustment-Standards_-25000/Sugar-Beet/
2019-25450-1H-Sugar-Beet-Loss-Adjustment-Standards.ashx.
    Comment: The commenter supports the addition of a new ``early 
harvest factor'' adjustment to the Sugar Beet Crop Insurance 
Provisions. Sugar beets differ from other major crops in that they are 
grown almost exclusively under contract to regionally-based grower-
owned processing companies. Producers deliver their harvested beets to 
the processor, which then refines them into pure sugar. The timing of 
each farmer's delivery of their raw beets to the processing factory is 
critical to its efficient operation. As a result, producers are often 
required to harvest and deliver portions of a crop prior to its full 
maturity, before the crop's tonnage and sugar content have reached 
normal peak levels. The result can be an unintended penalty, through no 
fault of the individual farmer, against the annual yield (called 
``production to count'') that the farmer can count toward his or her 
historical APH, the basis for determining future coverage.
    The ``early harvest factor'' adjustment addresses this problem by 
allowing a producer, if required to harvest early, to adjust the 
``production to count'' for that portion of the crop for purposes of 
calculating their future APH. The adjustment is equal to 1 percent per 
day for each day prior to full maturity, and ``full maturity'' is 
defined as 45 days before the end of the insurance period. The size of 
the adjustment is based on an extensive set of data assembled by 
outside counsel for ASGA from each of the grower owned processing 
companies, showing the precise amount by which tonnage and sugar 
content vary during the early-harvest period.
    The commenter believes this new process will benefit many sugar 
beet producers while protecting the underwriting soundness of the FCIC 
program. That said, the commenter wishes to comment on three 
operational points that could have a significant effect on its 
performance.
    Response: FCIC thanks the commenter and appreciates their input.
    Comment: The changes being implemented by the 2019 Sugar Beet Crop 
Provisions rewrite have several significant elements that are not fully 
disclosed in the final rule as many are now to be solely contained in 
the actuarial documents (of which no drafts are provided), e.g., 
calendar date for EOI, variances to the Early Harvest default date, 
updated percentages of raw sugar, etc. Without knowing what changes 
will be made it is impossible to adequately review and comment. For the 
reasons outlined above, it is recommended that this CFR rule change be 
delayed until the 2020 crop year and tentative actuarial document 
references are available for review.
    Postponing the proposed changes until the 2020 crop year would 
allow time for:
     The Special Provisions, CIH, and LASH to be updated;
     The AIPs to receive the clarification needed to convert 
the APH from standardized tons to pounds of raw sugar; and
     The sugar beet processors to update the software to 
capture any additional information that may be needed for claims to be 
processed when the early dig factor needs to be applied.
    Response: FCIC thanks the commenter and appreciates their input.
    Comment: Commenter is frustrated that the commenter is unable to 
see any comments on this at all. If insurance regulators or sugar beet 
farmers are supposed to take an active role in the rule-making process, 
comments should be made public. This may be one of many rules being 
promulgated, but there is no reason to treat this any differently than 
another rule. You should re-open the notice and comment section again 
and allow comments to be made public.
    Response: FCIC is summarizing public comments received and 
addressing those comments in this final

[[Page 65637]]

rule and is opening the rule for further public comment.

Effective Date and Notice and Comment

    In general, the Administrative Procedure Act (APA, 5 U.S.C. 553) 
requires that a notice of proposed rulemaking be published in the 
Federal Register for interested persons to be given an opportunity to 
participate in the rulemaking through submission of written data, 
views, or arguments with or without opportunity for oral presentation 
and requires a 30-day delay in the effective date of rules, except when 
the rule involves a matter relating to public property, loans, grants, 
benefits, or contracts. This rule involves matters relating to 
contracts and therefore the requirements in section 553 do not apply. 
Although not required by APA, FCIC has chosen to request comments on 
this rule.
    The Office of Management and Budget (OMB) designated this rule as 
not major under the Congressional Review Act, as defined by 5 U.S.C. 
804(2). Therefore, FCIC is not required to delay the effective date for 
60 days from the date of publication to allow for Congressional review. 
Accordingly, this rule is effective November 30, 2019.

Executive Orders 12866, 13563, 13771 and 13777

    Executive Order 12866, ``Regulatory Planning and Review,'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review,'' 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasized the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility. Executive Order 13777, 
``Enforcing the Regulatory Reform Agenda,'' established a federal 
policy to alleviate unnecessary regulatory burdens on the American 
people.
    The Office of Management and Budget (OMB) designated this rule as 
not significant under Executive Order 12866, ``Regulatory Planning and 
Review,'' and therefore, OMB has not reviewed this rule.
    Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' requires that in order to manage the private costs 
required to comply with Federal regulations that for every new 
significant or economically significant regulation issued, the new 
costs must be offset by the elimination of at least two prior 
regulations. As this rule is designated as not significant, it is not 
subject to Executive Order 13771.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by 
SBREFA, generally requires an agency to prepare a regulatory analysis 
of any rule whenever an agency is required by APA or any other law to 
publish a proposed rule, unless the agency certifies that the rule will 
not have a significant economic impact on a substantial number of small 
entities. This rule is not subject to the Regulatory Flexibility Act 
because as noted above, this rule is exempt from APA and no other law 
requires that a proposed rule be published for this rulemaking 
initiative.

Clarity of the Regulation

    Executive Order 12866, as supplemented by Executive Order 13563, 
requires each agency to write all rules in plain language. In addition 
to your substantive comments on this rule, we invite your comments on 
how to make the rule easier to understand. For example:
     Are the requirements in the rule clearly stated? Are the 
scope and intent of the rule clear?
     Does the rule contain technical language or jargon that is 
not clear?
     Is the material logically organized?
     Would changing the grouping or order of sections or adding 
headings make the rule easier to understand?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     Would more, but shorter, sections be better? Are there 
specific sections that are too long or confusing?
     What else could we do to make the rule easier to 
understand?

Environmental Review

    In general, the environmental impacts of rules are to be considered 
in a manner consistent with the provisions of the National 
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347) and the 
regulations of the Council on Environmental Quality (40 CFR parts 1500-
1508). FCIC conducts programs and activities that have been determined 
to have no individual or cumulative effect on the human environment. As 
specified in 7 CFR 1b.4, FCIC is categorically excluded from the 
preparation of an Environmental Analysis or Environmental Impact 
Statement unless the FCIC Manager (agency head) determines that an 
action may have a significant environmental effect. The FCIC Manager 
has determined this rule will not have a significant environmental 
effect. Therefore, FCIC will not prepare an environmental assessment or 
environmental impact statement for this action and this rule serves as 
documentation of the programmatic environmental compliance decision.

Executive Order 12372

    Executive Order 12372, ``Intergovernmental Review of Federal 
Programs,'' requires consultation with State and local officials that 
would be directly affected by proposed Federal financial assistance. 
The objectives of the Executive Order are to foster an 
intergovernmental partnership and a strengthened Federalism, by relying 
on State and local processes for State and local government 
coordination and review of proposed Federal financial assistance and 
direct Federal development. For reasons specified in the final rule 
related notice regarding 7 CFR part 3015, subpart V (48 FR 29115, June 
24, 1983), the programs and activities in this rule are excluded from 
the scope of Executive Order 12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, ``Civil 
Justice Reform.'' This rule will not preempt State or local laws, 
regulations, or policies unless they represent an irreconcilable 
conflict with this rule. Before any judicial actions may be brought 
regarding the provisions of this rule, the administrative appeal 
provisions of 7 CFR part 11 are to be exhausted.

Executive Order 13132

    This rule has been reviewed under Executive Order 13132, 
``Federalism.'' The policies contained in this rule do not have any 
substantial direct effect on States, on the relationship between the 
Federal Government and the States, or on the distribution of power and 
responsibilities among the various levels of government, except as 
required by law. Nor does this rule impose substantial direct 
compliance costs on State and local governments. Therefore, 
consultation with the States is not required.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, ``Consultation and Coordination with Indian 
Tribal Governments.'' Executive Order 13175 requires Federal agencies 
to consult and coordinate with Tribes on a government-to-government 
basis on policies that have Tribal implications,

[[Page 65638]]

including regulations, legislative comments or proposed legislation, 
and other policy statements or actions that have substantial direct 
effects on one or more Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes or on the distribution of power 
and responsibilities between the Federal Government and Indian Tribes.
    FCIC has assessed the impact of this rule on Indian Tribes and 
determined that this rule does not, to our knowledge, have Tribal 
implications that require Tribal consultation under E.O. 13175. The 
regulation changes do not have Tribal implications that preempt Tribal 
law and are not expected have a substantial direct effect on one or 
more Indian Tribes. If a Tribe requests consultation, FCIC will work 
with the USDA Office of Tribal Relations to ensure meaningful 
consultation is provided where changes, additions and modifications 
identified in this rule are not expressly mandated by Congress.

Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Pub. L. 
104-4) requires Federal agencies to assess the effects of their 
regulatory actions of State, local, and Tribal governments or the 
private sector. Agencies generally must prepare a written statement, 
including cost benefits analysis, for proposed and final rules with 
Federal mandates that may result in expenditures of $100 million or 
more in any 1 year for State, local or Tribal governments, in the 
aggregate, or to the private sector. UMRA generally requires agencies 
to consider alternatives and adopt the more cost effective or least 
burdensome alternative that achieves the objectives of the rule. This 
rule contains no Federal mandates, as defined in Title II of 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.

Federal Assistance Program

    The title and number of the Federal Domestic Assistance Program 
listed in the Catalog of Federal Domestic Assistance to which this rule 
applies is No. 10.450--Crop Insurance.

Paperwork Reduction Act of 1995

    In accordance with the provisions of the Paperwork Reduction Act of 
1995 (44 U.S.C. chapter 35, subchapter I), the rule does not change the 
information collection approved by OMB under control numbers 0563-0053.

E-Government Act Compliance

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

List of Subjects in 7 CFR Part 457

    Acreage allotments, Crop insurance, Reporting and recordkeeping 
requirements.

Final Rule

    For the reasons discussed above, FCIC amends 7 CFR part 457, 
effective for the 2020 and succeeding crop years in states with a 
November 30 contract change date and for the 2021 and succeeding crop 
years in all other states, 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) and 1506(o).


0
2. Amend Sec.  457.109 as follows:
0
a. In section 1:
0
 i. Remove the definition of ``Initially planted'';
0
 ii. Add definitions for ``Percentage of raw sugar'' and ``Pound'' in 
alphabetical order;
0
 iii. Revise definition of ``Practical to replant'';
0
 iv. Remove the definition of ``Processor contract''; and
0
v. Add definitions for ``Production agreement'' and ``Ton'' in 
alphabetical order;
0
b. Revise sections 2 and 3;
0
c. Add section 6;
0
d. In section 7:
0
 i. Revise paragraphs (a)(3) and (b)(2); and
0
 ii. In paragraph (b)(4), add quotation marks around the term 
``processor'';
0
e. Revise section 12; and
0
f. In section 13:
0
i. Revise paragraphs (d) introductory text, (d)(1), (e) introductory 
text, and (e)(1);
0
 ii. Revise paragraphs (f)(2) and (3); and
0
 iii. Add paragraphs (f)(4) and (5), (g), and (h).
    The revisions and additions read as follows:


Sec.  457.109  Sugar Beet Crop Insurance Provisions.

* * * * *
1. Definitions
* * * * *
    Percentage of raw sugar. Quantity of sugar determined from 
analytical tests of samples performed by the processor or other 
laboratories approved by us.
* * * * *
    Pound. Sixteen (16) ounces avoirdupois.
    Practical to replant. In addition to the definition in section 1 of 
the Basic Provisions, it will not be considered practical to replant if 
production from the replanted acreage cannot be delivered under the 
terms of the production agreement, or 30 days after the initial 
planting date for all counties where a late planting period is not 
applicable, unless replanting is generally occurring in the area.
* * * * *
    Production agreement. A written contract between you and the 
processor, executed on or before the acreage reporting date, which is 
in effect for the crop year, containing at a minimum:
    (1) Your commitment to plant, grow, and deliver the sugar beet 
production to the processor; and
    (2) The processor's commitment to purchase the production stated in 
the contract.
* * * * *
    Ton. Two thousand (2,000) pounds avoirdupois.
2. Unit Division
    In addition to the requirements of section 34 of the Basic 
Provisions, basic units may be divided into optional units only if you 
have a production agreement that requires the processor to accept all 
production from a number of acres specified in the production 
agreement. Acreage insured to fulfill a production agreement which 
provides that the processor will accept a designated amount of 
production or a combination of acreage and production will not be 
eligible for optional units.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining 
Indemnities.
    The production guarantee will be expressed in pounds of raw sugar.
* * * * *
6. Report of Acreage
    In addition to the requirements of section 6 of the Basic 
Provisions, you must provide a copy of all production agreements to us 
on or before the acreage reporting date. Insured Crop
    (a) * * *
    (3) That are grown under a production agreement and are not 
excluded from the production agreement at any time during the crop 
year; and
* * * * *
    (b) * * *
    (2) The Board of Directors or officers of the processor must have 
adopted and

[[Page 65639]]

executed a corporate resolution that contains essentially the same 
terms as a production agreement. Such corporate resolution will be 
considered a production agreement under the terms of the sugar beet 
crop insurance policy;
* * * * *
12. Duties in the Event of Damage or Loss
    In accordance with the requirements of section 14 of the Basic 
Provisions, representative samples of the unharvested crop 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
* * * * *
    (d) Harvested production or unharvested production that is 
appraised after the earliest delivery date that the processor accepts 
harvested production and that meets the minimum acceptable standards 
contained in the production agreement or corporate resolution will be 
converted to pounds of raw sugar by multiplying the tons of such 
production by 2,000 and by the average percentage of raw sugar to 
determine the production to count. The average percentage of raw sugar 
will be determined from tests performed by the processor or other 
laboratories approved by us at the time of delivery or sample 
acquisition (appraisal).
    (1) If individual tests of raw sugar content are not made at the 
time of delivery, the average percent of raw sugar may be based on the 
results of your previous tests performed by the processor or other 
laboratories approved by us during the crop year if it is determined 
that such results are representative of the total production.
* * * * *
    (e) Harvested production or unharvested production that is 
appraised after the earliest delivery date that the processor accepts 
harvested production and that does not meet the minimum acceptable 
standards contained in the production agreement or corporate resolution 
due to an insured peril will be converted to pounds of raw sugar by 
multiplying the tons of such damaged production by 2,000 and by the 
average percent of raw sugar contained in such production. The average 
percentage of raw sugar will be determined from tests performed by the 
processor or other laboratories approved by us at the time of crop 
delivery or sample acquisition (appraisal).
    (1) If individual tests of raw sugar content are not made at the 
time of delivery, the average percent of raw sugar may be based on the 
results of your previous tests performed by the processor or other 
laboratories approved by us during the crop year if it is determined 
that such results are representative of the total production.
* * * * *
    (f) * * *
    (2) The adjustment will not be made if the sugar beets are damaged 
by an insurable cause of loss and leaving the crop in the field would 
reduce production.
    (3) The adjustment cannot result in a yield greater than the higher 
of your approved actual production history yield or the actual yield of 
the production harvested after full maturity from the unit.
    (4) The adjustment will only be made if early harvest is required 
in the production agreement, or the processor requests early harvest 
prior to full maturity.
    (5) If the production agreement does not require early harvest and 
the processor has not requested early harvest, and the processor:
    (i) Accepts the early harvested production, the early harvested 
production will be counted but no early harvest adjustment will apply.
    (ii) Does not accept the early harvested production, the production 
to count will be the production guarantee for the acreage harvested 
early.
    (g) If harvested production is damaged due to an insurable cause of 
loss and is rejected by the processor but is sold to a salvage buyer at 
a reduced price: Compute the pounds of raw sugar of the sold production 
by dividing the gross dollar amount paid by the salvage buyer by the 
established price.
    (h) If production is damaged due to an insurable cause of loss to 
the extent that the processor will not accept the production, such as 
the production did not meet the standards contained in the production 
agreement; and there are no salvage markets for the production, then 
there would be no value for production and there would be no production 
to count provided the production is destroyed in a manner acceptable to 
us.
* * * * *

Martin R. Barbre,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2019-25844 Filed 11-27-19; 8:45 am]
BILLING CODE 3410-08-P