Early Harvest Insurance Flexibility for Sugar Beets, 78226-78230 [2023-25123]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Rules and Regulations]
[Pages 78226-78230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25123]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

[Docket ID FCIC-23-0007]
RIN 0563-AC84


Early Harvest Insurance Flexibility for Sugar Beets

AGENCY: Federal Crop Insurance Corporation, U.S. Department of 
Agriculture (USDA).

ACTION: Final rule with request for comments.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) is amending the 
Common Crop Insurance Regulations, Sugar Beet Crop Insurance 
Provisions. This rule makes the early harvest adjustment an option, 
providing producers with maximum flexibility to tailor their insurance 
policy to meet the unique risk management needs of their operation. 
This rule also incorporates comments to improve the early harvest 
adjustment that were received on a prior final rule amending the Sugar 
Beet Crop Insurance Provisions, published in the Federal Register on 
November 29, 2019. The changes will be effective for the 2024 and 
succeeding crop years for counties with a contract change date on or 
after November 30, 2023, and for the 2025 and succeeding crop years for 
counties with a contract change date prior to November 30, 2023.

DATES: 
    Effective date: November 30, 2023.
    Comment date: We will consider comments that we receive by the 
close of business January 16, 2024. FCIC will consider the comments 
received and may conduct additional rulemaking in the future based on 
the comments.

ADDRESSES: We invite you to submit comments on this rule. You may 
submit comments by going through the Federal eRulemaking Portal as 
follows:
     Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FCIC-23-0007. Follow the 
instructions for submitting comments.
    All comments will be posted without change and will be publicly 
available on www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-
7829; or email [email protected]. Persons with disabilities who 
require alternative means for communication should contact the USDA 
Target Center at (202) 720-2600 (voice) or (844) 433-2774 (toll-free 
nationwide).

SUPPLEMENTARY INFORMATION:

Background

    FCIC serves America's agricultural producers through effective, 
market-based risk management tools to strengthen the economic stability 
of agricultural producers and rural communities. FCIC is committed to 
increasing the availability and effectiveness of Federal crop insurance 
as a risk management tool. Approved Insurance Providers (AIPs) sell and 
service Federal crop insurance policies in every state through a 
public-private partnership. FCIC reinsures the AIPs who share the risks 
associated with catastrophic losses due to major weather events. FCIC's 
vision is to secure the future of agriculture by providing world class 
risk management tools to rural America.
    Federal crop insurance policies typically consist of the Basic 
Provisions, the Crop Provisions, the Special Provisions, the Commodity 
Exchange Price Provisions, if applicable, other applicable endorsements 
or options, the actuarial documents for the insured agricultural 
commodity, the Catastrophic Risk Protection Endorsement, if applicable, 
and the applicable regulations published in 7

[[Page 78227]]

CFR chapter IV. Throughout this rule, the terms ``Crop Provisions,'' 
``Special Provisions,'' and ``policy'' are used as defined in the 
Common Crop Insurance Policy (CCIP) Basic Provisions in 7 CFR part 
457.8. Additional information and definitions related to Federal crop 
insurance policies are in 7 CFR 457.8.
    In this rule, FCIC is making the early harvest adjustment an option 
and making other improvements to the early harvest adjustment in 
response to public comments and other input from the American Sugarbeet 
Growers Association (ASGA) and AIPs. The FCIC has a long history of 
working closely with the ASGA and AIPs in tailoring this program to the 
unique risk management needs of sugar beet growers.

Early Harvest Adjustment Option

    For the 2019 crop year, FCIC added an early harvest adjustment to 
the Crop Provisions in the Common Crop Insurance Regulations; Sugar 
Beet Crop Insurance Provisions final rule, published in the Federal 
Register on September 10, 2018 (83 FR 45535-45539). In response to 
public comments, FCIC made additional changes in the Common Crop 
Insurance Regulations; Sugar Beet Crop Insurance Provisions final rule 
published in the Federal Register on November 29, 2019 (84 FR 65627-
65639). The early harvest adjustment, as amended, was created to limit 
the effects to producers' Approved Production History (APH) databases 
from processor requirements to harvest sugar beets before they reach 
full maturity. Sugar beets that are harvested early are smaller in size 
and have a lower percent of sugar than beets harvested at full 
maturity, resulting in a lower net weight in the producer's APH 
database for that year. The lower yield remains in the producer's APH 
database for a minimum of 10 years, reducing their future potential 
insurance guarantee.
    Prior to this rule, the early harvest adjustment applied if the 
threshold in the Special Provisions was exceeded. For those acres 
harvested early, the producer's yield in their APH database was 
automatically adjusted upwards by one percent per day covering the time 
until the sugar beets would have reached full maturity. This adjustment 
was intended to protect their future guarantee.
    With the publication of the 2019 final rule, concerns were raised 
during the public comment period by ASGA that the early harvest 
adjustment could affect a producer's claim or possible claim in the 
event of an insurable cause of loss. For example, if some acres were 
early harvested and the yield was adjusted upwards, but the producer 
subsequently had an insured cause of loss that reduced their yield, the 
upward early harvest adjustment could have an offsetting effect on the 
claim for indemnity.
    ASGA requested that the early harvest adjustment be made an 
optional feature of the Crop Provisions. Making the early harvest 
adjustment optional will allow producers greater flexibility and limit 
the possible negative impacts to a producer's APH due to technological 
yield improvements.
    In this rule, FCIS is making the early harvest adjustment optional, 
which allows producers to opt-in to the early harvest adjustment. 
Producers choosing this option will be required to select the option by 
the sales closing date. The producer will be able to choose which years 
from their APH database to apply the early harvest adjustment for 
production that was harvested early. The producer's premium will 
reflect the additional coverage between the adjusted yields and actual 
yields selected by the producer. The producer may have a higher 
approved yield and insurance coverage when an actual yield is adjusted 
in an APH database. If adjusting a yield will result in an increased 
approved yield, a higher insurance guarantee and greater indemnity 
payment could occur due to the early harvest adjustment. The producer 
will pay a higher premium for the increase in coverage. For example, a 
producer with a 65 percent coverage level may get a yield guarantee 
equivalent to a higher coverage level, such as 70 percent. Because of 
the early harvest adjustment option, the premium charged will reflect 
the higher effective coverage level (70 percent for this example) and 
higher risk of loss. If a producer elects the early harvest adjustment 
option, their premium will be adjusted while other producers who did 
not elect the option will not pay additional premium. It will be the 
AIP's responsibility to ensure that the approved yield is calculated 
correctly, which determines the appropriate premium amount.
    In making the early harvest adjustment an option, all producers 
will be required to recertify their APH database with their AIP to 
remove those yields from their database from the years that the 
adjustment was automatically applied. This will ensure that only those 
producers who elect the option going forward, will be charged the 
additional premium associated with the adjusted yields.
    To elect the early harvest adjustment option, producers must choose 
the option by the sales closing date and must have additional coverage 
(that is, not a Catastrophic Risk Protection Endorsement). The option 
will remain in effect for future years, unless cancelled. On or before 
the production reporting date, the producer can replace actual yields 
with early harvested adjusted yields. The adjustment will only be made 
if a threshold of at least 15 percent of the insured acreage in the 
unit is early harvested, unless the Special Provisions specify a 
different threshold. 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.
    During the decision-making process for this rule, FCIC was 
committed to reaching a desirable outcome for all program stakeholders. 
FCIC regularly communicated with ASGA, on behalf of their grower 
constituency, and AIPs to gain consensus on the framework of the 
proposed changes and overcome challenges and points of disagreement.
    AIPs expressed concerns regarding additional administrative burdens 
on producers who will be required to recertify their APH databases. 
FCIC worked closely with ASGA to confirm, on behalf of their producer 
constituency, their support for these changes, including the 
requirement for producers to recertify their APH databases to implement 
these requested changes.
    Additionally, ASGA requested to exclude the adjustments to early 
harvested productions on acreage with a claim. However, as identified 
by AIPs, due to the discretion producers have in choosing which acreage 
to early harvest, waiving adjustments on acreage with a claim would 
have introduced unwanted moral hazard in the program. FCIC believes it 
has landed on common, middle ground, as these choices give the producer 
maximum flexibility to tailor their insurance to their operation, while 
maintaining the actuarial soundness of the Federal crop insurance 
program.

Early Harvest Adjustment Cap

    Following the comment period for the 2019 final rule, AIPs raised 
additional concerns, on behalf of their insured producers, with the 
limits (commonly referred to as a ``cap'') on the early harvest 
adjustment. The cap is the maximum amount a particular actual yield can 
be adjusted to. The early harvest adjustment was capped at the higher 
of the approved yield (the average of all yields in an APH database and 
the basis for which the unit guarantee is calculated) or the actual 
yield of the production harvested after

[[Page 78228]]

full maturity from the unit. Due to improvements in sugar beet 
technology, yield potential has increased, and it is possible that a 
producer's early harvested actual yield exceeds the limit even before 
the adjustment was applied. In these cases, the actual yield was capped 
at the approved yield even though the actual yield was higher than the 
approved yield.
    In this rule, FCIC is modifying the limits to the early harvest 
adjustment to account for situations where early harvested actual 
yields would have surpassed the previous cap. The changes address the 
cases where the actual early harvest yield prior to the early harvest 
adjustment exceeds the approved yield. The cap was intended to ensure 
adjustments don't exceed realistic yields; it was never the intent of 
the cap to reduce an actual yield.

Clarifications and Grammatical Corrections

    In this rule, FCIC is capitalizing ``Crop Provisions'' in two 
places to be consistent with the CCIP Basic Provisions. In section 17, 
FCIC is clarifying that the Stage Removal Option is only available if 
provided in the actuarial documents.

Effective Date, Notice and Comment, and Exemptions

    The Administrative Procedure Act (APA, 5 U.S.C. 553) provides that 
the notice and comment and 30-day delay in the effective date 
provisions do not apply when the rule involves specified actions, 
including matters relating to contracts. This rule governs contracts 
for crop insurance policies and therefore falls within that exemption.
    This rule is exempt from the regulatory analysis requirements of 
the Regulatory Flexibility Act (5 U.S.C. 601-612), as amended by the 
Small Business Regulatory Enforcement Fairness Act of 1996. The 
requirements for the regulatory flexibility analysis in 5 U.S.C. 603 
and 604 are specifically tied to the requirement for a proposed rule 
under 5 U.S.C. 553 or any other law; in addition, the definition of 
rule in 5 U.S.C. 601 is tied to the publication of a proposed rule.
    For major rules, the Congressional Review Act requires a delay of 
the effective date of 60 days after publication to allow for 
Congressional review. This rule is not a major rule under the 
Congressional Review Act, as defined by 5 U.S.C. 804(2). Therefore, 
this final rule is effective on November 30, 2023. Although not 
required by APA or any other law, FCIC has chosen to request comments 
on this rule.

Executive Orders 12866 and 13563

    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. The requirements in 
Executive Orders 12866 and 13563 for the analysis of costs and benefits 
apply to rules that are determined to be significant or economically 
significant.
    The Office of Management and Budget (OMB) has designated this rule 
as not significant under Executive Order 12866, ``Regulatory Planning 
and Review,'' and therefore, OMB has not reviewed this rule and 
analysis of the costs and benefits is not required under either 
Executive Order 12866 or 13563.

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

    The environmental impacts of this final rule have been considered 
in a manner consistent with the provisions of the National 
Environmental Policy Act (NEPA, 42 U.S.C. 4321-4347), the regulations 
of the Council on Environmental Quality (40 CFR parts 1500-1508), and 
because USDA will be making the payments to producers, the USDA 
regulation for compliance with NEPA (7 CFR part 1b). As specified in 7 
CFR 1b.4(b)(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 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 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, 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.
    The Risk Management Agency (RMA) 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 Executive Order 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, RMA 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.

[[Page 78229]]

The Unfunded Mandates Reform Act of 1995

    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 Assistance Listing,\1\ to which this 
rule applies is No. 10.450--Crop Insurance.
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    \1\ See https://sam.gov/content/assistance-listings.
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Paperwork Reduction Act of 1995

    The purpose of the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35, subchapter I), among other things, are to minimize the 
paperwork burden on individuals, and to require Federal agencies to 
request and receive approval from the Office of Management and Budget 
(OMB) prior to collecting information from ten or more persons. This 
rule does not change the information collection approved by OMB under 
control numbers 0563-0053.

USDA Non-Discrimination Policy

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family or parental status, income derived from a public 
assistance program, political beliefs, or reprisal or retaliation for 
prior civil rights activity, in any program or activity conducted or 
funded by USDA (not all bases apply to all programs). Remedies and 
complaint filing deadlines vary by program or incident.
    Individuals who require alternative means of communication for 
program information (for example, braille, large print, audiotape, 
American Sign Language, etc.) should contact the responsible Agency or 
the USDA TARGET Center at (202) 720-2600 (voice and text telephone 
(TTY)) or dial 711 for Telecommunications Relay Service (both voice and 
text telephone users can initiate this call from any telephone). 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and 
at any USDA office or write a letter addressed to USDA and provide in 
the letter all the information requested in the form. To request a copy 
of the complaint form, call (866) 632-9992. Submit your completed form 
or letter to USDA by: (1) mail to: U.S. Department of Agriculture, 
Office of the Assistant Secretary for Civil Rights, 1400 Independence 
Avenue SW, Washington, DC 20250-9410; (2) fax: (202) 690-7442; or (3) 
email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

List of Subjects in 7 CFR Part 457

    Acreage allotments, Crop insurance, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the supplementary information, FCIC 
amends 7 CFR part 457, as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for part 457 continues to read as follows:

    Authority:  7 U.S.C. 1506(l), 1506(o).


0
2. Amend Sec.  457.109 by:
0
a. In the introductory paragraph, remove the words ``for effective for 
the 2023 and succeeding crop years in states with a November 30 
contract change date and for the 2024'' and add the words ``effective 
for the 2024 and succeeding crop years in states with a November 30 
contract change date and for the 2025'' in their place;
0
b. In section 1, add definitions of ``Early harvest'' and ``Full 
maturity (date of)'' in alphabetical order;
0
c. In section 8, remove the words ``crop provisions'' and add ``Crop 
Provisions'' in each place they appear;
0
d. In section 14:
0
i. Remove paragraph (f); and
0
ii. Redesignate paragraphs (g) and (h) as paragraphs (f) and (g);
0
e. In section 17:
0
i. Redesignate paragraphs (a)(1) through (4) as paragraphs (a)(2) 
through (5); and
0
ii. Add new paragraph (a)(1); and
0
f. Add a new section 18.
    The revisions and additions read as follows:


Sec.  457.109  Sugar Beet Crop Insurance Provisions.

* * * * *
Definitions
* * * * *
    Early harvest. Harvest of sugar beets prior to full maturity.
    Full maturity (date of). The date the sugar beets would have 
reached full maturity is 45 days prior to the calendar date for the end 
of the insurance period, unless otherwise specified in the Special 
Provisions.
* * * * *
17. Stage Removal Option
    (a) * * *
    (1) If provided in the actuarial documents, you may elect the Stage 
Removal Option.
* * * * *
18. Early Harvest Adjustment Option
    (a) Applicability:
    (1) If provided in the actuarial documents, you may elect the Early 
Harvest Adjustment Option to adjust your actual yield(s) for early 
harvested production.
    (2) You must have additional coverage to elect this option.
    (3) You must elect this option in writing on or before the sales 
closing date.
    (4) This election is continuous, in accordance with section 2 of 
the Basic Provisions, unless canceled by the cancellation date. Your 
election of the Catastrophic Risk Protection Endorsement for your sugar 
beets will cancel this option.
    (b) Insurance Guarantees:
    (1) APH database--On or before the production reporting date, you 
may replace actual yields with early harvest adjusted yields in your 
APH database, if this option is elected.
    (i) The early harvest adjusted yields will be used in the same 
manner as actual yields for the purpose of calculating the approved 
yield.
    (ii) Once an early harvest adjusted yield replaces an actual yield, 
the early harvest adjusted yield will remain in effect until such time 
as that crop year is no longer included in the APH

[[Page 78230]]

database, this option is canceled in accordance with section 18(a)(4), 
or the insured chooses to no longer replace that actual yield(s) by the 
production reporting date.
    (iii) If you cancel the option, the actual yield will be used in 
the APH database.
    (2) Premium--Your approved yield will be used to determine your 
amount of premium owed. The premium will be increased to cover the 
additional risk associated with the resulting higher yields.
    (3) Adjustment--The adjustment will equal an increase of your 
actual yield by 1 percent per day for each day the sugar beets were 
harvested prior to full maturity.
    (4) Threshold--The adjustment will only be made if the early 
harvested percentage of insured acreage in the unit meets or exceeds 15 
percent, unless otherwise specified in the Special Provisions.
    (5) Cap--The adjustment cannot result in a yield greater than the 
higher of:
    (i) Your approved yield from the unit;
    (ii) The actual yield of the acreage harvested after full maturity 
from the unit; or
    (iii) The unadjusted actual yield of the early harvested acreage 
from the unit.
    (6) Processor requirement--The adjustment will only be made if:
    (i) Early harvest is required in the production agreement; or
    (ii) The processor requests early harvest.
    (c) Settlement of Claim--If this option is elected, production to 
count from the unit will be determined by:
    (1) The adjustment will be made for any early harvested production 
if the threshold is exceeded for the unit.
    (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) 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 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.
* * * * *

Marcia Bunger,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2023-25123 Filed 11-14-23; 8:45 am]
BILLING CODE 3410-08-P