General Crop Insurance Regulations, Rice Endorsement; and Common Crop Insurance Regulations, Rice Crop Insurance Provisions

Executive Order 12866

The Office of Management and Budget (OMB) has determined this rule to be exempt for the purposes of Executive Order 12866, and therefore, this rule has not been reviewed by OMB.

Paperwork Reduction Act of 1995

Following publication of the proposed rule, the public was afforded 60 days to submit written comments on information collection requirements previously approved by OMB under OMB control number 0563- 003 through September 30, 1998. No public comments were received.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for state, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12612

It has been determined under section 6(a) of Executive Order No. 12612, Federalism, that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on states or their political subdivisions, or on the distribution of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

This regulation will not have a significant impact on a substantial number of small entities. New provisions included in this rule will not impact small entities to a greater extent than large entities. Under the current regulations, a producer is required to complete an application and acreage report. If the crop is damaged or destroyed, the insured is required to give notice of loss and provide the necessary information to complete a claim for indemnity. The insured must also annually certify to the previous years production if adequate records are available to support the certification. The producer must maintain the production records to support the certified information for at least three years. This regulation does not alter those requirements. The amount of work required of the insurance companies delivering and servicing these policies will not increase significantly from the amount of work currently required. This rule does not have any greater or lesser impact on the producer. Therefore, this action is determined to be exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605), and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

Executive Order 12372

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with state and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

Executive Order 12988

This final rule has been reviewed in accordance with Executive Order 12988. The provisions of this rule will not have a retroactive effect prior to the effective date. The provisions of this rule will preempt state and local laws to the extent such state and local laws are inconsistent herewith. The administrative appeal provisions published at 7 CFR part 11 must be exhausted before any action for judicial review may be brought.

Environmental Evaluation

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

National Performance Review

This regulatory action is being taken as part of the National Performance Review Initiative to eliminate unnecessary or duplicative regulations and improve those that remain in force.

Background

On Wednesday, January 29, 1997, FCIC published a proposed rule in the Federal Register at 62 FR 4194-4200 to add to the Common Crop Insurance Regulations (7 CFR part 457), a new section, 7 CFR 457.141, Rice Crop Insurance Provisions. The new provisions will be effective for the 1998 and succeeding crop years. These provisions will replace and supercede the current provisions for insuring rice found at 7 CFR 401.120 (Rice Endorsement). FCIC also amends 7 CFR part 401.120 to limit its effect to the 1997 and prior crop years. Following publication of the proposed rule, the public was afforded 60 days to submit written comments and opinions. A total of 14 comments were received from the crop insurance industry. The comments received and FCIC's responses, are as follows: Comment: One comment from the crop insurance industry recommended adding the words ``and quality'' after the word ``quantity'' in the definition of ``Irrigated practice.'' Response: Water quality is an important issue. However, since no standards or procedures have been developed to measure water quality for insurance purposes, quality cannot be included in the definition. Therefore, no change will be made. Comment: One comment received from the crop insurance industry recommended combining the definitions of ``irrigated practice'' and ``flood irrigation.'' The only crop provision reference to ``irrigated practice'' is in the definition of ``flood irrigated.'' The commenter suggested as an alternative, add ``An irrigated practice commonly used* * *'' to the definition of ``flood irrigation.'' Response: FCIC agrees with the comment and has revised the definition of flood irrigation to reference the term irrigated practice. Comment: One comment received from the crop insurance industry recommended changing the definition of ``production guarantee'' by referring to ``your approved APH yield.'' The commenter stated the current provision implies there is only one APH yield. Response: There is only one APH yield for each unit. Therefore, no change will be made. Comment: Two comments from the crop insurance industry stated that the definition of ``replanting'' is confusing and awkward. One of the commenters recommended revising the definition to specify ``* * *growing a successful rice crop.'' Response: FCIC agrees that the definition was confusing and has amended the definition of replanting for clarification. Comment: The crop insurance industry recommended that FCIC provide the statements contained in the Special Provisions at the time the crop provisions are published as proposed rule. The commenter suggested that it would be helpful to review the Special Provisions statement regarding the rotation requirements referred to in section 7. Response: The Special Provisions contain those policy terms which are specific to a county. These are not included in FCIC's regulatory process because publication of each county and each crop would be voluminous. Further, the information contained in the Special Provisions is not developed until after the Crop Provisions become a final rule. The statements are released with the filing of actuarial documents for the insured crop. Therefore, no change will be made. Comment: One comment received from the crop insurance industry recommended revising the cause of loss in section 9(a)(1) to state ``adverse weather conditions (except drought).'' This change would conform FCIC's crop provisions to the current NCIS-716 provisions.

Response: FCIC agrees and will amend the provision accordingly.

Comment: One comment received from the crop insurance industry stated that the crop provisions should not allow the insured to defer settlement of a claim for indemnity as provided in section 12(c)(1)(iv). The commenter stated deferring settlement and waiting for a later appraisal usually results in a lower amount of appraised production. Response: A later appraisal will only be necessary if the insurance provider agrees that such an appraisal would result in a more accurate determination and if the producer continues to care for the crop. If the producer does not care for the crop, the original appraisal will be used. Therefore, no change will be made to these provisions. Comment: The crop insurance industry recommended that the provisions contained in section 13(d)(1)(iii)(B) regarding prevented planting coverage for a substitute crop be eliminated. Response: FCIC intends to address this issue for all crops with prevented planting coverage and is currently working on a regulation that will propose substantive changes in this coverage. Therefore, no changes will be made to these rice crop provisions. Comment: One comment from the crop insurance industry questioned if the provisions contained in section 13(d)(5)(iii)(D) were intended to be less restrictive by changing the double-cropping requirement to state ``* * *in each of the last 4 years in which the insured crop was grown on the acreage.'' The commenter suggested this change should be included in the summary of changes so that agents and producers were aware of the change. Response: The proposed language allows additional acreage to be considered ``double-cropped.'' The previous provisions require eight crops to have been produced on the same acreage in the previous four years to qualify for double-cropped acreage. The intent of this change is to recognize rotation practices used for double-cropped acreage. Comment: One comment from the crop insurance industry suggested combining the provisions in section 14(c) with the provisions in 14(a). Response: Approval of written agreements requested after the sales closing date is the exception, not the rule. Therefore, these provisions should be kept separate and no changes have been made. Comment: Three comments from the crop insurance industry recommended the requirement for a written agreement to be renewed each year be removed. Terms of the agreement should be continuous if no substantive changes occur from one year to the next. One commenter stated that limiting written agreements to one year only increases administrative cost and allows the opportunity for misunderstanding and error. Response: Written agreements are intended to permit insurance coverage in unusual or previously unknown situations. If the situation continues year to year, it should be incorporated into the policy or Special Provisions. It is important to minimize exceptions to assure that the insured is well aware of the specific terms of the policy. Therefore, no change will be made.

List of Subjects in 7 CFR Parts 401 and 457

Crop insurance, Rice endorsement, Rice.

Final Rule

Accordingly, for the reasons set forth in the preamble, the Federal Crop Insurance Corporation hereby amends 7 CFR parts 401 and 457 effective for the 1998 and succeeding crop years to read as follows:

PART 401--GENERAL CROP INSURANCE REGULATIONS--REGULATIONS FOR THE 1988 AND SUBSEQUENT CONTRACT YEARS

1. The authority citation for 7 CFR part 401 continues to read as follows:

Authority: 7 U.S.C. 1506(1), 1506(p).

2. The introductory text of Sec. 401.120 is revised to read as follows:

Sec. 401.120 Rice endorsement.

The provisions of the Rice Crop Insurance Endorsement for the 1988 through the 1997 crop years are as follows: * * * * *

PART 457--COMMON CROP INSURANCE REGULATIONS; REGULATIONS FOR THE 1994 AND SUBSEQUENT CONTRACT YEARS

3. The authority citation for 7 CFR part 457 continues to read as follows:

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

Section 457.141 is added to read as follows:

Sec. 457.141 Rice crop insurance provisions.

The Rice Crop Insurance Provisions for the 1998 and succeeding crop years are as follows:

FCIC policies:

United States Department of Agriculture

Federal Crop Insurance Corporation

Reinsured policies:

(Appropriate title for insurance provider)

Both FCIC and reinsured policies:

Rice Crop Provisions

If a conflict exists among the Basic Provisions (Sec. 457.8), these Crop Provisions, and the Special Provisions; the Special Provisions will control these Crop Provisions and the Basic Provisions; and these Crop Provisions will control the Basic Provisions.

1. Definitions

Days. Calendar days. FSA. The Farm Service Agency, an agency of the United States Department of Agriculture, or a successor agency. Final planting date. The date contained in the Special Provisions for the insured crop by which the crop must initially be planted in order to be insured for the full production guarantee. Flood irrigation. An irrigated practice commonly used for rice production whereby the planted acreage is intentionally covered with water that is maintained at a uniform and shallow depth throughout the growing season. Good farming practices. The cultural practices generally in use in the county for the crop to make normal progress toward maturity and produce at least the yield used to determine the production guarantee, and are those recognized by the Cooperative State Research, Education, and Extension Service as compatible with agronomic and weather conditions in the county. Harvest. Combining or threshing the rice for grain. A crop that is swathed prior to combining is not considered harvested. Irrigated practice. A method of producing a crop by which water is artificially applied during the growing season by appropriate systems and at the proper times, with the intention of providing the quantity of water needed to produce at least the yield used to establish the irrigated production guarantee on the irrigated acreage planted to the insured crop. Late planted. Acreage planted to the insured crop during the late planting period. Late planting period. The period that begins the day after the final planting date for the insured crop and ends 25 days after the final planting date. Local market price. The cash price per pound for the U.S. No. 3 grade of rough rice offered by buyers in the area in which you normally market the rice. Factors not associated with grading under the United States Standards for Rice including, but not limited to, protein and oil content or milling quality will not be considered. Planted. The uniform placement of an adequate amount of rice seed into a prepared seedbed by one of the following methods: (a) Drill seeding--Using a grain drill to incorporate the seed to a proper soil depth; (b) Broadcast seeding--Distributing seed evenly onto the surface of an un-flooded seedbed followed by either timely mechanical incorporation of the seed to a proper soil depth in the seedbed or flushing the seedbed with water; or (c) Broadcast seeding into a controlled flood--Distributing the rice seed onto a prepared seedbed that has been intentionally covered to a proper depth by water. The water must be free of movement and be completely contained on the acreage by properly constructed levees and gates. Acreage seeded in any other manner will not be insurable unless otherwise provided by the Special Provisions or by written agreement. Practical to replant. In lieu of the definition of ``Practical to replant'' contained in section 1 of the Basic Provisions (Sec. 457.8), practical to replant is defined as our determination, after loss or damage to the insured crop, based on factors, including but not limited to moisture availability, marketing windows, condition of the field, and time to crop maturity, that replanting the insured crop will allow the crop to attain maturity prior to the calendar date for the end of the insurance period. It will not be considered practical to replant after the end of the late planting period unless replanting is generally occurring in the area. Prevented planting. Inability to plant the insured crop with proper equipment by the final planting date designated in the Special Provisions for the insured crop in the county or the end of the late planting period. You must have been unable to plant the insured crop due to an insured cause of loss that has prevented the majority of producers in the surrounding area from planting the same crop. Production guarantee (per acre). The number of pounds determined by multiplying the approved Actual Production History (APH) yield per acre by the coverage level percentage you elect. Replanting. Performing the cultural practices necessary to replace the rice seed and then replacing the rice seed in the insured acreage with the expectation of growing a rice crop that will at least produce the approved APH yield. Saline water. Water that contains a concentration of salt sufficient to cause damage to the insured crop. Second crop rice. The regrowth of a stand of rice following harvest of the initially insured rice crop that can be harvested in the same crop year. Swathed. Severance of the stem and grain head from the ground without removal of the rice kernels from the plant and placing in a windrow. Timely planted. Planted on or before the final planting date designated in the Special Provisions for the insured crop in the county. Total milling yield. Rice production consisting of heads, second heads, screenings, and brewer's rice as defined by the official United States Standards for Rice. Written agreement. A written document that alters designated terms of this policy in accordance with section 14.

2. Unit Division

(a) Unless limited by the Special Provisions, a unit as defined in section 1 (Definitions) of the Basic Provisions (Sec. 457.8), (basic unit) may be divided into optional units if, for each optional unit, you meet all the conditions of this section. (b) Basic units may not be divided into optional units on any basis including, but not limited to, production practice, type, variety, and planting period, other than as described in this section. (c) If you do not comply fully with these provisions, we will combine all optional units that are not in compliance with these provisions into the basic unit from which they were formed. We will combine the optional units at any time we discover that you have failed to comply with these provisions. If failure to comply with these provisions is determined to be inadvertent, and the optional units are combined into a basic unit, that portion of the additional premium paid for the optional units that have been combined will be refunded to you. (d) All optional units you selected for the crop year must be identified on the acreage report for that crop year. (e) The following requirements must be met for each optional unit: (1) You must have records, which can be independently verified, of planted acreage and production for each optional unit for at least the last crop year used to determine your production guarantee; (2) You must plant the crop in a manner that results in a clear and discernable break in the planting pattern at the boundaries of each optional unit; (3) You must have records of marketed production or measurement of stored production from each optional unit maintained in such a manner that permits us to verify the production from each optional

unit, or the production from each unit must be kept separate until loss adjustment is completed by us; and (4) Each optional unit must be located in a separate legally identified section. In the absence of sections, we may consider parcels of land legally identified by other methods of measure including, but not limited to Spanish grants, railroad surveys, leagues, labors, or Virginia Military Lands, as the equivalent of sections for unit purposes. In areas that have not been surveyed using the systems identified above, or another system approved by us, or in areas where such systems exist but boundaries are not readily discernable, each optional unit must be located in a separate farm identified by a single FSA Farm Serial Number unless otherwise specified by a written agreement.

3. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities

In addition to the requirements of section 3 (Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities) of the Basic Provisions (Sec. 457.8), you may select only one price election for all the rice in the county insured under this policy unless the Special Provisions provide different price elections by type, in which case you may select one price election for each rice type designated in the Special Provisions. The price elections you choose for each type must have the same percentage relationship to the maximum price offered by us for each type. For example, if you choose 100 percent of the maximum price election for one type, you must also choose 100 percent of the maximum price election for all other types.

4. Contract Changes

In accordance with section 4 (Contract Changes) of the Basic Provisions (Sec. 457.8), the contract change date is November 30 preceding the cancellation date.

5. Cancellation and Termination Dates

In accordance with section 2 (Life of Policy, Cancellation and Termination) of the Basic Provisions (Sec. 457.8), the cancellation and termination dates are:

------------------------------------------------------------------------ Cancellation and termination State and county date ------------------------------------------------------------------------ Jackson, Victoria, Goliad, Bee, Live Oak, January 15. McMullen, La Salle, and Dimmit Counties, Texas; and all Texas counties south thereof. Florida.................................. February 15. All other Texas counties and all other February 28. states. ------------------------------------------------------------------------

6. Insured Crop

In accordance with section 8 (Insured Crop) of the Basic Provisions (Sec. 457.8), the crop insured will be all the rice in the county for which a premium rate is provided by the actuarial table: (a) In which you have a share; (b) That is planted for harvest as grain; (c) That is flood irrigated; and (d) That is not wild rice.

7. Insurable Acreage

In addition to the provisions of section 9 (Insurable Acreage) of the Basic Provisions (Sec. 457.8): (a) We will not insure any acreage planted to rice: (1) The preceding crop year unless allowed by the Special Provisions; or (2) That does not meet the rotation requirements shown in the Special Provisions; and (b) Any acreage of the insured crop damaged before the final planting date, to the extent that producers in the area would normally not further care for the crop, must be replanted unless we agree that it is not practical to replant.

8. Insurance Period

In accordance with the provisions of section 11 (Insurance Period) of the Basic Provisions (Sec. 457.8), the calendar date for the end of the insurance period is October 31 immediately following planting.

9. Causes of Loss

(a) In accordance with the provisions of section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), insurance is provided only against the following causes of loss that occur during the insurance period: (1) Adverse weather conditions (except drought); (2) Fire; (3) Insects, but not damage due to insufficient or improper application of pest control measures; (4) Plant disease, but not damage due to insufficient or improper application of disease control measures; (5) Wildlife; (6) Earthquake; (7) Volcanic eruption; or (8) Failure of the irrigation water supply, if caused by an insured peril that occurs during the insurance period. (b) In addition to the causes of loss not insured against in section 12 (Causes of Loss) of the Basic Provisions (Sec. 457.8), we will not insure against any loss of production due to the application of saline water.

10. Replanting Payment

(a) A replanting payment for rice is allowed as follows: (1) You must comply with all requirements regarding replanting payments contained under section 13 (Replanting Payment) of the Basic Provisions (Sec. 457.8); (2) The rice must be damaged by an insurable cause of loss to the extent that the remaining stand will not produce at least 90 percent of the production guarantee for the acreage; and (3) The replanted rice must be seeded at a rate that is normal for initially planted rice (if new seed is planted at a reduced seeding rate into a partially damaged stand of rice, the acreage will not be eligible for a replanting payment). (b) In accordance with the provisions of section 13 (Replanting Payment) of the Basic Provisions (Sec. 457.8), the maximum amount of the replanting payment per acre will be the lesser of 20 percent of the production guarantee or 400 pounds, multiplied by your price election, multiplied by your insured share. (c) When rice is replanted using a practice that is uninsurable for an original planting, the liability for the unit will be reduced by the amount of the replanting payment. The premium amount will not be reduced.

11. Duties in the Event of Damage or Loss

In accordance with the requirements of section 14 (Duties in the Event of Damage or Loss) of the Basic Provisions (Sec. 457.8), the 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.

12. Settlement of Claim

(a) We will determine your loss on a unit basis. In the event you are unable to provide separate acceptable production records: (1) For any optional units, we will combine all optional units for which such production records were not provided; or (2) For any basic units, we will allocate any commingled production to such units in proportion to our liability on the harvested acreage for the units. (b) In the event of loss or damage covered by this policy, we will settle your claim on any unit by: (1) Multiplying the insured acreage by its respective production guarantee by type, if applicable; (2) Multiplying each result in section 12(b)(1) by the respective price election by type, if applicable; (3) Totaling the results of section 12(b)(2); (4) Multiplying the total production to be counted by type, if applicable, (see section 12(c) through (e)) by the respective price election; (5) Totaling the results of section 12(b)(4); (6) Subtracting the result of section 12(b)(5) from the result of section 12(b)(3); and (7) Multiplying the result of section 12(b)(6) by your share. (c) The total production to count (in pounds) from all insurable acreage on the unit will include: (1) All appraised production as follows: (i) Not less than the production guarantee for acreage: (A) That is abandoned; (B) Put to another use without our consent; (C) That is damaged solely by uninsured causes; or (D) For which you fail to provide acceptable production records; (ii) Production lost due to uninsured causes; (iii) Unharvested production (mature unharvested production may be adjusted for quality deficiencies and excess moisture in accordance with section 12(d)); (iv) Potential production on insured acreage that you intend to put to another use or abandon, if you and we agree on the appraised amount of production. Upon such agreement, the insurance period for that acreage will end when you put the acreage to another use or abandon the crop. If agreement on the appraised amount of production is not reached: (A) If you do not elect to continue to care for the crop, we may give you consent to put

the acreage to another use if you agree to leave intact, and provide sufficient care for, representative samples of the crop in locations acceptable to us (The amount of production to count for such acreage will be based on the harvested production or appraisals from the samples at the time harvest should have occurred. If you do not leave the required samples intact, or you fail to provide sufficient care for the samples, our appraisal made prior to giving you consent to put the acreage to another use will be used to determine the amount of production to count); or (B) If you elect to continue to care for the crop, the amount of production to count for the acreage will be the harvested production, or our reappraisal if additional damage occurs and the crop is not harvested; and (2) All harvested production from the insurable acreage, including any production from a second rice crop harvested in the same crop year. (d) Mature rough rice may be adjusted for excess moisture and quality deficiencies. If moisture adjustment is applicable, it will be made prior to any adjustment for quality. (1) Production will be reduced by 0.12 percent for each 0.1 percentage point of moisture in excess of 12 percent. We may obtain samples of the production to determine the moisture content. (2) Production will be eligible for quality adjustment if: (i) Deficiencies in quality, in accordance with the Official United States Standards for Rice, result in rice not meeting the grade requirements for U.S. No. 3 (grades U.S. No. 4 or worse) because of red rice, chalky kernels or damaged kernels; (ii) The rice has a total milling yield of less than 68 pounds per hundredweight; (iii) The whole kernel weight is less than 55 pounds per hundredweight of milled rice for medium and short grain varieties; (iv) The whole kernel weight is less than 48 pounds per hundredweight of milled rice for long grain varieties; or (v) Substances or conditions are present that are identified by the Food and Drug Administration or other public health organizations of the United States as being injurious to human or animal health. (3) Quality will be a factor in determining your loss only if: (i) The deficiencies, substances, or conditions specified in section 12(d)(2) resulted from a cause of loss against which insurance is provided under these crop provisions and which occurs within the insurance period; (ii) The deficiencies, substances, or conditions specified in section 12(d)(2) result in a net price for the damaged production that is less than the local market price; (iii) All determinations of these deficiencies, substances, or conditions specified in section 12(d)(2) are made using samples of the production obtained by us or by a disinterested third party approved by us; and (iv) The samples are analyzed by a grader licensed to grade rice under the authority of the United States Agriculture Marketing Act or the United States Warehouse Act with regard to deficiencies in quality, or by a laboratory approved by us with regard to substances or conditions injurious to human or animal health. Notwithstanding the preceding sentence, test weight for quality adjustment purposes may be determined by our loss adjuster. (4) Rice production that is eligible for quality adjustment, as specified in sections 12(d)(2) and (3), will be reduced as follows: (i) In accordance with quality adjustment factors contained in the Special Provisions; or (ii) If quality adjustment factors are not contained in the Special Provisions, as follows: (A) The market price of the qualifying damaged production and the local market price will be determined on the earlier of the date such quality adjusted production is sold or the date of final inspection for the unit. The price for the qualifying damaged production will be the market price for the local area to the extent feasible. Discounts used to establish the net price of the damaged production will be limited to those that are usual, customary, and reasonable. The price will not be reduced for: (1) Moisture content; (2) Damage due to uninsured causes; or (3) Drying, handling, processing, or any other costs associated with normal harvesting, handling, and marketing of the rice; except, if the price of the damaged production can be increased by conditioning, we may reduce the price of the production after it has been conditioned by the cost of conditioning but not lower than the value of the production before conditioning, (We may obtain prices from any buyer of our choice. If we obtain prices from one or more buyers located outside your local market area, we will reduce such prices by the additional costs required to deliver the rice to those buyers.); (B) The value of the damaged or conditioned production will be divided by the local market price to determine the quality adjustment factor; and (C) The number of pounds remaining after any reduction due to excessive moisture (the moisture-adjusted gross pounds (if appropriate)) of the damaged or conditioned production will then be multiplied by the quality adjustment factor to determine the net production to count. (e) Any production harvested from plants growing in the insured crop may be counted as production of the insured crop on a weight basis.

13. Late Planting and Prevented Planting

(a) In lieu of provisions contained in the Basic Provisions (Sec. 457.8) regarding acreage initially planted after the final planting date and the applicability of a Late Planting Agreement Option, insurance will be provided for acreage planted to the insured crop during the late planting period (see section 13(c)), and acreage you were prevented from planting (see section 13(d)). These coverages provide reduced production guarantees. The premium amount for late planted acreage and eligible prevented planting acreage will be the same as that for timely planted acreage. If the amount of premium you are required to pay (gross premium less our subsidy) for late planted acreage or prevented planting acreage exceeds the liability on such acreage, coverage for those acres will not be provided, no premium will be due, and no indemnity will be paid for such acreage. (b) If you were prevented from planting, you must provide written notice to us not later than the acreage reporting date. (c) Late Planting (1) For rice acreage planted during the late planting period, the production guarantee for each acre will be reduced for each day planted after the final planting date by: (i) One percent (1%) per day for the 1st through the 10th day; and (ii) Two percent (2%) per day for the 11th through the 25th day. (2) In addition to the requirements of section 6 (Report of Acreage) of the Basic Provisions (Sec. 457.8), you must report the dates the acreage is planted within the late planting period. (3) If planting of rice continues after the final planting date, or you are prevented from planting during the late planting period, the acreage reporting date will be the later of: (i) The acreage reporting date contained in the Special Provisions for the insured crop; or (ii) Five (5) days after the end of the late planting period. (d) Prevented Planting (Including Planting After the Late Planting Period) (1) If you were prevented from timely planting rice, you may elect: (i) To plant rice during the late planting period. The production guarantee for such acreage will be determined in accordance with section 13(c)(1); (ii) Not to plant this acreage to any crop except a cover crop not for harvest. You may also elect to plant the insured crop after the late planting period. In either case, the production guarantee for such acreage will be thirty-five percent (35%) of the production guarantee for timely planted acres. For example, if your production guarantee for timely planted acreage is 2,000 pounds per acre, your prevented planting production guarantee would be 700 pounds per acre (2,000 pounds multiplied by 0.35). If you elect to plant the insured crop after the late planting period, production to count for such acreage will be determined in accordance with sections 12 (c) through (e); or (iii) Not to plant the intended crop but plant a substitute crop for harvest, in which case: (A) No prevented planting production guarantee will be provided for such acreage if the substitute crop is planted on or before the 10th day following the final planting date for the insured crop; or (B) A production guarantee equal to 17.5 percent of the production guarantee for timely planted acres will be provided for such acreage, if the substitute crop is planted after the 10th day following the final planting date for the insured crop. If you elected the Catastrophic Risk Protection Endorsement or excluded this coverage, and plant a substitute crop, no prevented planting coverage will be provided. For example, if your production guarantee for timely planted acreage is 2,000 pounds per acre, your prevented planting production guarantee would be 350 pounds

per acre (2,000 pounds multiplied by 0.175). You may elect to exclude prevented planting coverage when a substitute crop is planted for harvest and receive a reduction in the applicable premium rate. If you wish to exclude this coverage, you must so indicate, on or before the sales closing date, on your application or on a form approved by us. Your election to exclude this coverage will remain in effect from year to year unless you notify us in writing on our form by the applicable sales closing date for the crop year for which you wish to include this coverage. All acreage of the crop insured under this policy will be subject to this exclusion. (2) Production guarantees for timely, late, and prevented planting acreage within a unit will be combined to determine the production guarantee for the unit. For example, assume you insure one unit in which you have a 100 percent share. The unit consists of 150 acres, of which 50 acres were planted timely, 50 acres were planted 7 days after the final planting date (late planted), and 50 acres were not planted but are eligible for a prevented planting production guarantee. The production guarantee for the unit will be computed as follows: (i) For the timely planted acreage, multiply the per acre production guarantee for timely planted acreage by the 50 acres planted timely; (ii) For the late planted acreage, multiply the per acre production guarantee for timely planted acreage by 93 percent and multiply the result by the 50 acres planted late; and (iii) For prevented planting acreage, multiply the per acre production guarantee for timely planted acreage by: (A) Thirty-five percent (35%) and multiply the result by the 50 acres you were prevented from planting, if the acreage is eligible for prevented planting coverage, and if the acreage is left idle for the crop year, or if a cover crop is planted not for harvest. Prevented planting compensation hereunder will not be denied because the cover crop is hayed or grazed; or (B) Seventeen and five tenths percent (17.5%) and multiply the result by the 50 acres you were prevented from planting, if the acreage is eligible for prevented planting coverage, and if you elect to plant a substitute crop for harvest after the 10th day following the final planting date for the insured crop. (This paragraph (B) is not applicable, and prevented planting coverage is not available under these crop provisions, if you elected the Catastrophic Risk Protection Endorsement or you elected to exclude prevented planting coverage when a substitute crop is planted (see section 13 (d)(1)(iii))). Your premium will be based on the result of multiplying the per acre production guarantee for timely planted acreage by the 150 acres in the unit. (3) You must have the inputs available to plant and produce the intended crop with the expectation of at least producing the production guarantee. Proof that these inputs were available may be required. (4) In addition to the provisions of section 11 (Insurance Period) of the Basic Provisions (Sec. 457.8), the insurance period for prevented planting coverage begins: (i) On the sales closing date contained in the Special Provisions for the insured crop in the county for the crop year the application for insurance is accepted; or (ii) For any subsequent crop year, on the sales closing date for the insured crop in the county for the previous crop year, provided continuous coverage has been in effect since that date. For example, if you make application and purchase insurance for rice for the 1998 crop year, prevented planting coverage will begin on the 1998 sales closing date for rice in the county. If the rice coverage remains in effect for the 1999 crop year (is not terminated or canceled during or after the 1998 crop year), prevented planting coverage for the 1999 crop year began on the 1998 sales closing date. Cancellation for the purpose of transferring the policy to a different insurance provider when there is no lapse in coverage will not be considered terminated or canceled coverage for the purpose of the preceding sentence. (5) The acreage to which prevented planting coverage applies will not exceed the total eligible acreage on all FSA Farm Serial Numbers in which you have a share, adjusted for any reconstitution that may have occurred on or before the sales closing date. Eligible acreage for each FSA Farm Serial Number is determined as follows: (i) If you participate in any program administered by the United States Department of Agriculture that limits the number of acres that may be planted for the crop year, the acreage eligible for prevented planting coverage will not exceed the total acreage permitted to be planted to the insured crop. (ii) If you do not participate in any program administered by the United States Department of Agriculture that limits the number of acres that may be planted, and unless we agree in writing on or before the sales closing date, eligible acreage will not exceed the greater of: (A) The FSA base acreage for the insured crop, including acres that could be flexed from another crop, if applicable; (B) The number of acres planted to rice on the FSA Farm Serial Number during the previous crop year; or (C) One-hundred percent of the simple average of the number of acres planted to rice during the crop years that you certified to determine your yield. (iii) A prevented planting production guarantee will not be provided for any acreage: (A) That does not constitute at least 20 acres or 20 percent of the acreage in the unit, whichever is less (Acreage that is less than 20 acres or 20 percent of the acreage in the unit will be presumed to have been intended to be planted to the insured crop planted in the unit, unless you can show that you had the inputs available before the final planting date to plant and produce another insured crop on the acreage); (B) For which the actuarial table does not designate a premium rate unless a written agreement designates such premium rate; (C) Used for conservation purposes or intended to be left unplanted under any program administered by the United States Department of Agriculture; (D) On which another crop is prevented from being planted, if you have already received a prevented planting indemnity, guarantee or amount of insurance for the same acreage in the same crop year, unless you provide adequate records of acreage and production showing that the acreage was double-cropped in each of the last 4 years in which the insured crop was grown on the acreage; (E) On which the insured crop is prevented from being planted, if any other crop is planted and fails, or is planted and harvested, hayed, or grazed on the same acreage in the same crop year (other than a cover crop as specified in section 13(d)(2)(iii)(A) or a substitute crop allowed in section 13(d)(2)(iii)(B)) unless you provide adequate records of acreage and production showing that the acreage was double-cropped in each of the last 4 years in which the insured crop was grown on the acreage; (F) When coverage is provided under the Catastrophic Risk Protection Endorsement if you plant another crop for harvest on any acreage you were prevented from planting in the same crop year, even if you have a history of double-cropping. If you have a Catastrophic Risk Protection Endorsement and receive a prevented planting indemnity, guarantee, or amount of insurance for a crop and are prevented from planting another crop on the same acreage, you may only receive the prevented planting indemnity, guarantee, or amount of insurance for the crop on which the prevented planting indemnity, guarantee, or amount of insurance is received; or (G) For which planting history or conservation plans indicate that the acreage would have remained fallow for crop rotation purposes. (iv) For the purpose of determining eligible acreage for prevented planting coverage, acreage for all units will be combined and be reduced by the number of rice acres timely planted and late planted. For example, assume you have 100 acres eligible for prevented planting coverage in which you have a 100 percent share. The acreage is located in a single FSA Farm Serial Number which you insure as two separate optional units consisting of 50 acres each. If you planted 60 acres of rice on one optional unit and 40 acres rice on the second optional unit, your prevented planting eligible acreage would be reduced to zero (i.e., 100 acres eligible for prevented planting coverage minus 100 acres planted equals zero). (6) In accordance with the provisions of section 6 (Report of Acreage) of the Basic Provisions (Sec. 457.8), you must report by unit any insurable acreage that you were prevented from planting. This report must be submitted on or before the acreage reporting date. For the purpose of determining acreage eligible for a prevented planting production guarantee, the total amount of prevented planting and planted acres cannot exceed the maximum number of acres eligible for prevented planting coverage. Any acreage you report in excess of the number of acres eligible for prevented planting coverage, or that exceeds the number of eligible acres physically located in a unit, will be deleted from your acreage report.

14. Written Agreements

Designated terms of this policy may be altered by written agreement in accordance with the following: (a) You must apply in writing for each written agreement no later than the sales closing date, except as provided in section 14(e); (b) The application for a written agreement must contain all variable terms of the contract between you and us that will be in effect if the written agreement is not approved; (c) If approved, the written agreement will include all variable terms of the contract, including, but not limited to, crop type or variety, the guarantee, premium rate, and price election; (d) Each written agreement will be valid for one year (If the written agreement is not specifically renewed the following year, insurance coverage for subsequent crop years will be in accordance with the printed policy); and (e) An application for a written agreement submitted after the sales closing date may be approved if, after a physical inspection of the acreage, it is determined that no loss has occurred and the crop is insurable in accordance with the policy and written agreement provisions.

Signed in Washington, D.C., on May 19, 1997. Kenneth D. Ackerman, Manager, Federal Crop Insurance Corporation. [FR Doc. 97-13656 Filed 5-22-97; 8:45 am] BILLING CODE 3401-08-P