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[Federal Register: September 4, 2008 (Volume 73, Number 172)]
[Rules and Regulations]
[Page 51573-51585]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04se08-1]
Rules and Regulations
Federal Register
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[[Page 51573]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
RIN 0563-AC14
Common Crop Insurance Regulations; Dry Pea Crop Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
Common Crop Insurance Regulations; Dry Pea Crop Insurance Provisions by
including the insurability of additional types of dry peas, by offering
winter coverage, by allowing replanting payments, and by making
chickpeas insurable under the Dry Pea Crop Provisions. The changes will
apply for the 2009 and succeeding crop years for all Dry Pea counties
with a contract change date on or after November 30, 2008.
DATES: Effective Date: This rule is effective October 6, 2008.
FOR FURTHER INFORMATION CONTACT: Claire White, Economist, Product
Management, Product Administration and Standards Division, Risk
Management Agency, United States Department of Agriculture, Beacon
Facility, Stop 0812, Room 421, PO Box 419205, Kansas City, MO 64141-
6205, telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is non-significant for the purpose of Executive Order 12866 and,
therefore, it has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by OMB under control number 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
to promote the use of the Internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. This rule contains no Federal mandates (under the
regulatory provisions of title II of the UMRA) for State, local, and
tribal governments or the private sector. Therefore, this rule is not
subject to the requirements of sections 202 and 205 of UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1000 acres, there is no difference in the kind
of information collected. To ensure crop insurance is available to
small entities, the Federal Crop Insurance Act authorizes FCIC to waive
collection of administrative fees from limited resource farmers. FCIC
believes this waiver helps to ensure that small entities are given the
same opportunities as large entities to manage their risks through the
use of crop insurance. A Regulatory Flexibility Analysis has not been
prepared since this regulation does not have an impact on small
entities, and therefore, this regulation is exempt from the provisions
of the Regulatory Flexibility Act (5 U.S.C. 605).
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988 on civil justice reform. The provisions of this rule will not
have a retroactive effect. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. With respect to any direct action taken by FCIC
or to requiring the insurance provider to take specific action under
the terms of the crop insurance policy, the administrative appeal
provisions published at 7 CFR part 11 must be exhausted before any
action against FCIC for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
This rule finalizes changes to 7 CFR part 457.140 (Dry Pea Crop
Insurance Provisions) that were published by FCIC
[[Page 51574]]
on January 18, 2008, as a notice of proposed rulemaking in the Federal
Register at 73 FR 3411-3417. The public was afforded 60 days to submit
comments after the regulation was published in the Federal Register.
A total of 119 comments were received from five commenters. The
commenters were one insurance services organization, one grower
association, and three insurance providers.
The public comments received regarding the proposed rule and FCIC's
responses to the comments are listed below (under applicable subject
headings) identifying issues and concerns, and the changes made, if
any, to address the comments.
General
Comment: One commenter stated contract seed peas and contract seed
beans have their own unique method for properly calculating the actual
production history (APH) as outlined in Exhibit 27 of the Crop
Insurance Handbook (CIH). The commenter claims it has to track back and
forth between dollars and pounds and receive 10 years of new Reference
(Base) Year Adjustment Factors (RYAF) each year. All 10 numbers change
every year. The commenter states that the intent of the procedure is
good as it tries to provide coverage for contract seed peas that do not
pass germination testing and, therefore, receive a reduced price.
However, the commenter thought this could also be accomplished by using
the same methodology as is used for green peas. This would simplify the
administration of this program and remove the need for having Exhibit
27 of the CIH as the APH would be based on `Dividing the dollar amount
received by the contract price per pound for the base contract price.'
Using the green pea methodology would allow the guarantee to be
expressed in pounds rather than dollars and eliminate the need for
RYAFs. The approved APH yield would no longer have to be converted from
dollars per acre to pounds per acre for entry on the acreage report.
The commenter states that this APH procedure has been in place only for
contract seed pea types of dry peas and contract seed bean types of dry
beans. The commenter recommended these procedures be reevaluated to see
if they are still necessary and if this procedure could be revised to
be consistent with what is being done for green peas. This would
simplify the administration of this program.
Response: Since the recommended change involves APH procedure and
not the Dry Pea Crop Provisions, no change has been made in the final
rule. FCIC will evaluate this recommendation to determine if APH
procedures for contract seed dry peas can be made consistent with seed
green peas.
Comment: Two commenters applauded FCIC for including chickpeas
(a.k.a. garbanzo beans) in the Dry Pea Crop Provisions. Chickpeas are
produced in dry pea and lentil growing regions and producers should
have the option to purchase coverage for these crops under one policy.
Response: FCIC has retained the provisions in the final rule that
allow chickpeas to be covered under the Dry Pea Crop Provisions in
applicable States and counties as determined by FCIC.
Comment: Two commenters stated the words ``fall planted'' and
``spring planted'' are most often used without hyphens throughout the
Crop Provisions, though hyphens are used in the section 13(b) example.
It would be helpful to be consistent, and preferably use the hyphens to
make it easier to read.
Response: FCIC has revised the provisions as suggested.
Section 1--Definitions
Comment: One commenter recommended the definition of ``base price''
be revised to include both ``seed company'' and ``processor'' contracts
because dry pea producers often have the choice to purchase seed from
seed companies and processors.
Response: FCIC has revised the definition of ``base contract
price'' to include processor contracts and now refers to ``processor/
seed company contract.'' FCIC has also removed the definitions of
``seed company'' and ``seed company contract'' and replaced the
definitions with ``processor/seed company'' and ``processor/seed
company contract,'' respectively. Therefore, the phrases ``seed
company'' and ``seed company contract'' have been replaced with the
phrases ``processor/seed company'' and ``processor/seed company
contract,'' respectively, throughout the policy to be consistent with
the definition of ``base contract price.''
Comment: Two commenters recommended replacing the word ``place''
with ``places'' in the definition of ``combining.''
Response: FCIC has revised the definition as suggested.
Comment: One commenter supported the revision to the definition of
``dry peas'' to allow insurability of additional types of dry peas in
accordance with the Special Provisions. Three commenters also stated
the word ``and'' before the word ``Chickpeas'' in the definition of
``dry peas'' should be removed and replaced with a comma. Two
commenters suggested rewording the phrase ``and those types'' to state
``and any other types.''
Response: FCIC has retained the provisions in the final rule, which
allows insurability of additional types of dry peas via the Special
Provisions. FCIC has removed the word ``and'' and replaced it with a
comma. FCIC has reworded the phrase ``and those types'' as ``and other
types.''
Comment: One commenter supported adding the sentence, ``dry peas
that are swathed prior to combining are not considered harvested,'' in
the definition of ``harvest.''
Response: FCIC proposed this change in the proposed rule and will
retain it in the final rule.
Comment: One commenter supported revising the definition of ``local
market price'' to specify that factors not associated with grading
factors under the United States Standards for Whole Dry Peas, Split
Peas and Lentils will not be considered, unless specified in the
Special Provisions.
Response: FCIC has retained the proposed definition in the final
rule.
Comment: Two commenters asked, in the definition of ``practical to
replant,'' if the added statement that it will not be considered
practical to replant fall-planted dry peas more than 25 days after the
final planting date for the corresponding spring-planted type of dry
pea conflicts with the last sentence of 8(b), which states ``We will
not require you to replant if it is not practical to replant the type
of dry peas originally planted.'' The commenters also asked if fall-
planted and spring-planted dry peas are different types or the same
type planted at different times.
Response: The commenter is correct that the statement that fall-
planted dry peas will not be considered practical to replant more than
25 days after the final planting date for the corresponding spring-
planted type of dry pea conflicts with the last sentence of 8(b). FCIC
has removed the referenced provisions of section 8(b). Fall-planted and
spring-planted dry peas are different types planted at different times.
Comment: Two commenters suggested reformatting the definition of
``practical to replant'' so it is easier to read.
Response: FCIC has reformatted the definition of ``practical to
replant'' to make it easier to read.
Comment: Three commenters suggested revising the definition of
``price election'' to change the term ``base price'' to ``base contract
price'' to match the revised definition of ``base contract price.''
[[Page 51575]]
Response: FCIC has revised the definition as suggested.
Comment: One commenter suggested adding a definition of ``sales
closing date'' to address the additional sales closing date that will
be established for acreage insured under the Winter Coverage Option.
Response: A definition of ``sales closing date'' does not need to
be added. Throughout the Dry Pea Crop Provisions, when reference is
made to insurance attaching under the Winter Coverage Option, the Crop
Provisions state the Winter Coverage Option must be elected by the
sales closing date. Further, the Special Provisions will contain the
sales closing date for counties with the Winter Coverage Option in
effect. No change will be made.
Comment: One commenter stated the word ``variety'' in the
definition of ``seed company contract'' has been changed to ``type.''
The commenter stated the contracts they have received in years past
make specific reference to a variety of seed and not a specific type.
The commenter asked if it will be considered an invalid contract if the
seed company contracts do not state the specific type or if the
contract states the specific variety whether the insurance provider can
determine the type.
The commenter also asked the following questions: (1) With the
proposed change to have the contract state a specific type, will
separate units by each type of dry pea seed under contract be allowed;
(2) will the Special Provisions be changed to identify each specific
type that is insurable by type for contract seed or will the Special
Provisions remain the same and all varieties of dry peas under contract
for seed will be insured as the contract seed pea type.
Response: The commenter is correct that processor contracts and
seed company contracts make specific reference to varieties, rather
than types. Therefore, FCIC has not retained the proposed changes. This
means that contract seed peas may be insured as a separate optional
unit only if contract seed peas are listed on the Special Provisions as
an insurable type. The distinct varieties listed on the contract will
not be eligible for separate optional units.
Comment: Two commenters suggested revising the definition of
``swathed'' in order to align it with the wording of ``swathed'' in
other Crop Provisions. In the proposed context, one may conclude and
argue that placing the crop into more than one windrow would not be
considered swathed.
Response: FCIC has revised the definition for clarification.
Section 2--Unit Division
Comment: Two commenters stated this section may need to be
clarified as they are not sure how contract seed peas fit into the unit
structure as defined in this section of the policy. The commenters
asked if Austrian peas grown under a seed company contract and other
Austrian peas not grown under a seed company contract in the same
section would qualify for separate optional units.
Response: Section 2 has been revised to clarify that separate
optional units can be established for contract seed peas and dry peas
not grown under a processor/seed company contract even if each type
shares a common variety, provided each type is grown on separate
acreage and the production is kept separate. This means that Austrian
peas grown under a processor/seed company contract and other Austrian
peas not grown under a processor/seed company contract in the same
section qualify for separate optional units, provided the Austrian peas
grown under a processor/seed company contract meet all policy
requirements for insurability as contract seed peas, and the producer
has elected optional units. Austrian peas grown for harvest as mature
dry peas would be insurable as either a: (1) Fall Austrian pea type; or
(2) spring Austrian pea type, whichever is applicable, if provided on
the Special Provisions, and all qualifying acreage of seed peas
(regardless of type, e.g. fall Austrian peas, spring smooth green and
yellow peas, etc.) would be insurable as a separate optional unit when
insured as a contract seed pea type. If the acreage of Austrian peas
grown under contract for seed did not meet the policy requirements to
be insured under the contract seed pea type, then this acreage and
acreage of Austrian peas not grown under contract would be included in
the same unit.
Comment: Two commenters said the proposed rule appears to delete
section 2(b), which currently allows optional units for contract seed
peas if the seed contract specifies the number of acres contracted. The
commenter asked if this means contract seed peas will no longer qualify
for separate optional units (unless there are separate contracts for
the different dry pea types that qualify), or will contract seed peas
be listed as a separate dry pea type on the Special Provisions. Since
the Special Provisions are not included in the proposed rule, it is
difficult to know what kind of change might be intended.
Response: Section 2 has been revised to clarify that contract seed
peas will qualify for optional units if contract seed peas are listed
as a separate type on the Special Provisions.
Section 3--Insurance Guarantees, Coverage Levels and Prices for
Determining Indemnities
Comment: One commenter stated they believe the intent of this
section is to limit the producer to the same single level of coverage
for all types of dry peas that are planted in the county. It also does
not change the requirement to report all acreage of dry peas planted in
the county that are planted to insurable types as listed in the Special
Provisions. This would make this policy consistent with the Dry Bean
Crop Provisions in that it would require all acreage of dry peas to be
insured and all types would be insured at the same coverage level. If
this is not the intent, the commenters recommended that it be changed
to match what is done for dry beans. Otherwise, if the insured is
allowed to have separate coverage levels by type, each type should be
treated as a different crop with a separate administrative fee, etc.
(i.e., California grapes). If the intent is to limit producers to the
same single level of coverage for all types, the language could be
further clarified as follows: ``In lieu of the requirements of section
3 of the Basic Provisions, you must select the same coverage level for
all types listed on the Special Provisions.'' The current language
indicates only a single level can be selected for each type but does
not stipulate that it must be the same. The above language clarifies
that only one level can be selected and it must be the same for all
types.
Response: The intent of the proposed provisions in section 3(a) and
3(b) is to allow separate coverage levels and price election
percentages by type listed on the Special Provisions. According to
section 7 of the Dry Pea Crop Provisions, all dry pea types in the
county for which there is a premium rate must be insured. Therefore,
the requirement to report all acreage of dry peas planted to insurable
types in the county remains the same. Offering a separate coverage
level by type does not automatically imply each type be treated as a
separate crop. No change has been made.
Comment: Two commenters also stated the language in proposed
section 3(a) allows separate coverage levels by type and proposed
section 3(b) allows separate price percentages by type. As is currently
proposed, this would allow different coverage levels for different
types even within the same unit. The
[[Page 51576]]
commenter does not know of any other crop that allows different
coverage levels within the crop and objects to allowing separate
coverage levels by type.
Response: The proposed provisions would allow different coverage
levels for different types even within the same basic unit. However,
since optional units are available by type, it is likely that most
producers will opt for optional units for each of their insurable types
of dry peas. Offering separate coverage levels by type provides the dry
pea producers another method to manage their risk.
Comment: One commenter stated there seems to be missing information
in proposed section 3(a) that surrounds the ability for the insured to
select different coverage levels by type. For example, two different
types of dry peas are listed on the application as being insured at a
70 percent and 65 percent coverage level, respectively. At acreage
reporting time, the producer identifies a third type of dry pea planted
that was not listed on the application. The commenter questions at what
coverage level would the insurance provider insure that type. One
suggestion is to allow the producer to select a coverage level for the
crop and if the producer wants to insure a specific type of dry peas at
a different coverage level, he must identify that separate coverage
level on the application for that specific type. If the producer does
not specify a separate coverage level for a specific type, the type
will be insured under the coverage level selected at the crop level.
Response: The commenter is correct that there is missing
information. FCIC has revised section 3 to include provisions stating
if a dry pea type is added after the sales closing date, the dry pea
type will be assigned a coverage level equal to the lowest coverage
level selected for any other dry pea types; and a price election
percentage equal to 100 percent if additional coverage is elected and
55 percent if catastrophic level of coverage is elected.
Comment: One commenter recommended that the last portion of the
lead-in paragraph in proposed section 3(b) be revised as follows: ``* *
* in which case you may select a different price election percentage
for each such dry pea type so designated in the Special Provisions * *
*'' This clarifies that if a different price election is offered by
type that a different price election percentage could be elected for
each such type and would be consistent with the Dry Bean Crop
Provisions.
Response: FCIC has broken section 3(b) into separate paragraphs for
clarity. FCIC has revised the newly designated section 3(b)(2) to
clarify if the Special Provisions designate a separate price election
by type, the producer may select one price election for each type
listed in the Special Provisions. The price election the producer
chooses for one type is not required to have the same percentage
relationship to the maximum price offered for another type.
Comment: Two commenters stated proposed section 3(b) says the
producer may select only one price election for all dry peas in the
county insured under this policy unless the Special Provisions provide
different price elections for a particular type, in which case the
producer may select one price election for each dry pea type so
designated in the Special Provisions. The commenters asked whether this
means that if the Special Provisions lists three dry pea types, with
one type having a different price election from the other two types
(which show the same price because of the market), those two types
would have to have the same price percentage. In the alternative, the
commenter asks whether it means that as long as the three types are
listed on separate lines, each with its own price election, those are
considered different price elections and producers can choose different
price percentages as well as different coverage levels under proposed
section 3(a). If it is the former, the commenter asks FCIC to consider
revising to ``* * * unless the Special Provisions provide a different
price election for a particular type * * *'' If the latter is correct,
the commenter asks that FCIC consider going back to the current
wording, ``* * * by type'' [as in (b)(1) & (3)]. Depending on the
response to these questions, the references in (b)(1) & (3) to
``different price elections by type'' may need to be reviewed as well.
Response: FCIC has revised the provisions in section 3(b) to
clarify that if there is more than one type of dry pea listed on the
Special Provisions, then each type may have a separate price election
percentage, regardless if the price for one type is the same as the
price for another type. For example, type A and type B are listed on
the Special Provisions. The price for type A is $0.12. The price for
type B is also $0.12. The price election percentage for type A and type
B do not have to be the same even though the price election for type A
is the same as the price election for type B.
Comment: Two commenters stated proposed section 3(b) states that if
there are different price elections, then the producer ``may select one
price election for each dry pea type,'' while proposed section 3(b)(1)
states ``the price elections you choose for each type are not required
to have the same percentage relationship to the maximum price offered
by us for each type.'' The commenter suggested the last phrase of (b)
should be deleted from (b) and combined with (b)(1), which would then
provide the additional options when separate price elections are
designated.
Response: The commenter is correct that the last phrase of section
3(b) should be deleted from (b) and added to the provisions that state
what options the producers have when separate price elections are
designated on the Special Provisions. As stated above, FCIC has also
reformatted section 3(b) to make it easier to read.
Comment: Two commenters stated proposed section 3(b)(2) should
either be moved to the end of section 3(a) because it refers to the
coverage level for catastrophic (CAT) level of coverage, instead of the
percentage of price election, or it should be reworded to address the
percentage of price election for CAT level of coverage. If it remains
in section 3(b), the commenter suggested it should be the first or last
of the three paragraphs under section 3(b) instead of between
paragraphs (1) and (3).
Response: FCIC has moved the provisions related to CAT coverage
proposed in section 3(b)(2) to section 3(a).
Comment: Two commenters suggested revising proposed section 3(b)(3)
because the current wording suggests the producer has a choice of price
elections even if price elections by type are not listed on the Special
Provisions. The commenters suggested revising it to say ``* * * the
same price election percentage applies for each dry pea type.''
Response: The commenter is correct that a producer does not have a
choice of multiple price elections when the Special Provisions do not
designate separate price elections by type. FCIC has revised section
3(b) to state if the Special Provisions do not designate separate price
elections by type, the producer may select only one price election for
all dry peas in the county.
Comment: One commenter supported the right of a producer to select
his/her own separate coverage level on dry peas, lentils and chickpeas.
Response: FCIC has retained the provisions in the final rule. The
producer is allowed to select a separate coverage level for each type
of dry peas.
Section 7--Insured Crop
Comment: Two commenters suggested deleting the word ``to'' before
the phrase ``otherwise not harvest'' in proposed section 7(a)(3)(iv).
[[Page 51577]]
Response: FCIC has revised the provisions as suggested.
Section 8--Insurable Acreage
Comment: Three commenters stated the last sentence of proposed
section 8(b), which states, ``We will not require you to replant if it
is not practical to replant the type of dry peas originally planted,''
indicates it is not required that the producer replant if it is not
practical to replant to the same type of dry peas originally planted.
The commenter questioned if this conflicts with the new language in
proposed section 9(d).
Response: The commenters are correct that the provisions in section
8(b) conflict with the new language in section 9(d). FCIC has removed
the current provisions in section 8(b) and moved the provisions
proposed in section 9(c), 9(d), and 9(e) to section 8 as some of the
language is duplicative and is more appropriate in section 8 regarding
insurable acreage than in section 9 regarding the insurance period.
Section 9--Insurance Period
Comment: Two commenters suggested adding a comma after the middle
phrase ``section 11 of the Basic Provisions'' and adding the word
``the'' before the word ``provisions'' in the introductory text of
section 9.
Response: FCIC has revised the provisions as suggested.
Comment: Three commenters stated the provision proposed in section
9(c) states the following: ``Any acreage of the insured crop damaged
before the final planting date, to the extent that producers in the
surrounding area would not further care for the crop, must be replanted
unless we agree that it is not practical to replant.'' This has the
current language regarding replanting, but otherwise essentially
duplicates provisions currently contained in proposed section 8(b). Two
commenters also stated the last sentence in the provisions currently
contained in section 8(b) states, ``* * * We will not require you to
replant if it is not practical to replant the type of dry peas
originally planted.'' The commenter asked if this sentence, and
proposed section 9(d), belong in section 9 or in section 8. The
commenters also stated similar replanting language also has been added
in proposed section 9(d), particularly (d)(1), and in section 9(e)(3).
The commenter asked that FCIC consider if this language must be
repeated in four different subsections.
Response: As stated above, the commenters are correct that section
9(c) duplicates provisions currently contained in section 8(b). FCIC
has removed the provisions currently contained in section 8(b) and the
language proposed in section 9(c) has been moved to section 8(b). As
stated above, the commenter is also correct that the entire proposed
section 9(d) belongs in section 8 because it related to insurable
acreage. The entire proposed section 9(e) has also been moved to
section 8 because it is more appropriate in section 8.
Comment: One commenter supported the proposal to offer the Winter
Coverage Option for dry peas and using the language from the Small
Grains Crop Provisions as a starting point for developing similar
language for dry peas. However, the commenter believed some of the
language in the Small Grains Crop Provisions that deals with counties
containing both fall and spring final planting dates is not appropriate
for dry peas and should be clarified as indicated below to be more
applicable for dry peas. The commenter stated the second part of
proposed section 9(d)(1) indicates that if it is not practical to
replant to a fall-planted type of dry peas that the insured must
replant to a spring type in order to maintain coverage based on the
fall-planted type. The commenter is concerned with the various
different types of dry peas that could be insured in some areas and the
different level of yields and prices that can exist between the
different types of dry peas (particularly fall types versus spring
types). The commenter recommended that in this situation, coverage
would revert to the respective spring type that is planted rather than
remain based on the fall-planted type, which may not be reflective of
the yield or price potential of the spring-planted type. In addition,
the current language would allow producers the ability to adversely
select against the insurance provider by planting a lower yielding or
priced spring type in these types of situations. The commenter also
stated the above comments would impact proposed section 9(e) as well.
The commenter references Austrian winter peas as an example of a fall-
planted type and they are not aware of a spring-planted version of this
same type of pea. The commenter stated that under this provision, if
they received a request to insure Austrian winter peas in a county with
only a spring final planting date, they would not be able to establish
a yield etc., for a spring seeded type as it does not exist. The
commenter recommended that coverage be based on the fall-planted dry
pea type in these types of situations. In addition, if damage occurs
after such acreage has been accepted for coverage, and must be
replanted to a spring-planted type, the commenter recommended the
coverage revert to the spring-planted type in these situations.
Response: FCIC has retained the Winter Coverage Option provisions
in the final rule. Coverage for the spring peas planted on failed fall
acreage should not revert to the respective spring-planted type rather
than remain based on the fall-planted type. Allowing spring-planted dry
peas to be insured as fall-planted dry peas when it has been replanted
on failed fall dry pea acreage is permitted because insurance has
already attached to the fall dry pea crop and replanting to the spring
crop is a means to mitigate the damages associated with the failed fall
crop.
FCIC is aware of Austrian pea varieties that are spring-planted.
Austrian peas (a.k.a black peas; dry peas with a dark and mottled seed
coat) are a variety of peas typically characterized as having moderate
to good winter survivability. Their cold temperature tolerance and
subsequent reproductive phase do not have a vernalization requirement
similar to winter wheat. Therefore, it can successfully be produced
when sown in the fall or spring.
Section 10--Causes of Loss
Comment: One commenter suggested clarifying section 10(b) to state
``Fire, due to natural causes.''
Response: No changes to this section were proposed. Further, the
current introductory text of section 10 states the specified causes of
loss are in accordance with the Basic Provisions. The Basic Provisions
contain the requirement that all causes of loss must be due to a
naturally occurring event. There is no reason to be repetitive. In
addition, to explicitly state that fire must be due to natural causes
while not including this language with the other listed causes losses
could create the mistaken impression that such other causes do not have
to be from natural causes. No change has been made.
Section 11--Replanting Payments
Comment: Two commenters stated the wording of the last phrase
regarding compliance with all replanting payment requirements in the
Basic Provisions ``* * * and in the Winter Coverage Option for which
you are eligible and which you have elected'' sounds as though every
dry pea producer will be eligible and will elect the Winter Coverage
Option. While the commenters realize this language was taken from the
current Small Grains Crop Provisions, they suggested FCIC consider
rephrasing
[[Page 51578]]
it something like ``* * * and in the Winter Coverage Option, if
applicable.''
Response: FCIC has revised the provisions accordingly.
Comment: Two commenters suggested deleting the period at the end of
section 11(a)(3) and replacing it with a semicolon to be consistent
with the other subsections.
Response: FCIC has revised the provisions as suggested.
Comment: Two commenters suggested deleting ``* * * (see section 15)
* * *'' in proposed section 11(a)(5) since the Winter Coverage Option
has already been referenced in (a)(2). The commenter also suggested
placing the parenthetical reference in proposed section 11(a)(2).
Response: FCIC has revised the provisions as suggested.
Comment: One commenter asked if the producer does not select the
Winter Coverage Option, but does have insured fall-planted acreage in a
county with a fall planting date, and damage occurs prior to insurance
attaching, are those acres still eligible for a replanting payment.
Response: If a producer has insured fall-planted acreage in a
county with a fall and spring final planting date, but does not elect
the Winter Coverage Option, the producer is not eligible for a
replanting payment. FCIC has revised the provisions in section 11 to
clarify fall-planted acreage not covered under the Winter Coverage
Option that is damaged after it is accepted for insurance but before
the spring sales closing date must be replanted but no replanting
payment will be made.
FCIC has also added provisions to section 11(a)(5) to clarify if
the Winter Coverage Option is in effect, damage must occur after the
fall final planting date for the acreage to be eligible for a
replanting payment. This revision clarifies the Winter Coverage Option
must be in effect in order for the fall acreage to be eligible for a
replanting payment.
Comment: Two commenters stated proposed section 11(b) provides a
maximum of ``* * * the lesser of 20.0 percent of the production
guarantee or 200 pounds * * *'' The commenter asks whether the
different dry pea types will have similar yields so that 200 pounds
will be appropriate for all. For example, if chickpeas are shifted from
the Dry Bean policy to the Dry Pea policy, they will have a much higher
maximum than before.
Response: The data shows that all dry pea types will have similar
yields and, therefore, the 200 pounds will be appropriate for all
types. FCIC recognizes chickpeas will have a higher maximum than they
previously did under the Dry Bean Crop Provisions but it should not be
excessive.
Comment: Two commenters stated the lead-in to proposed sections
11(d)(1) and (2) will read more smoothly with the word ``for'' added at
the end of proposed section 11(d).
Response: The addition of ``for'' would make the sentence
grammatically incorrect. No change has been made.
Comment: One commenter stated the last sentence of the lead-in
paragraph of section 11(d) could be removed in addition to items (1)
and (2). Damaged fall-planted acreage that is replanted to a spring-
planted type should have the coverage revert to the applicable spring
type that is planted. The commenter does not believe that item (d)(2)
will occur and could be removed as well.
Response: As stated above, coverage on the acreage replanted to a
spring type on failed fall-planted acreage should not revert to the
spring type, instead of the fall-planted type that was originally
planted. Allowing spring-planted dry peas to be insured as fall-planted
dry peas when it has been replanted after a failed fall dry pea crop is
permitted because insurance has already attached to the fall dry pea
crop and replanting to the spring crop is a means to mitigate the
damages associated with the failed fall crop. It is not considered a
new crop. No change has been made in response to this comment.
Section 12--Duties in the Event of Damage or Loss
Comment: One commenter stated since there is no change being made
to section 14 of the Basic Provisions, there does not appear to be a
need to retain this provision and it could be removed.
Response: Section 14 of the Basic Provisions states representative
samples must be left intact if the Crop Provisions require them. If the
provisions in section 12 were removed, producers would not be required
to maintain representative samples. Therefore, section 12 must remain
in the Dry Pea Crop Provisions in order to require representative
samples. FCIC is only removing provisions in section 12 of the Dry Pea
Crop Provisions that duplicate the provisions in the Basic Provisions.
No change has been made.
Comment: Two commenters supported changing the language in proposed
section 12 to delete the details and simply refer to section 14 of the
Basic Provisions regarding representative samples.
Response: FCIC has retained the provision in the final rule.
Section 13--Settlement of Claim
Comment: Two commenters recommended changing the word ``variety''
to ``type'' in proposed section 13(b)(4) to be consistent with
provisions throughout the policy.
Response: The word ``variety'' should not be changed to ``type'' in
section 13(b)(4). In the definition of ``seed company contract,'' which
has been renamed as ``processor/seed company contract,'' the word
``variety'' has been retained because varieties, rather than types, are
stated in the processor/seed company contracts. No change has been
made.
Comment: Two commenters suggested adding the word ``contract''
between the words ``base'' and ``price'' in proposed section 13(b)(5)
to be consistent with the revised definition of ``base contract
price.''
Response: FCIC has revised the provision as suggested.
Comment: Two commenters suggested changing ``400,000 pounds
guarantee'' to ``400,000-pound guarantee'' in step (1) of both examples
in proposed section 13(b), and step (2) of the second example in
proposed section 13(b). The commenter also suggested making a similar
change to ``500,000-pound guarantee'' in steps (4) and (5) of the
second example in proposed section 13(b).
Response: FCIC has revised the provisions as suggested.
Comment: Two commenters suggested changing the word ``variety'' to
``type'' in subsection (c) to be consistent with provisions throughout
the policy; changing ``base price'' to ``base contract price'' in
proposed section 13(c)(1) to match the revised definition of ``base
contract price;'' and changing ``seed pea processor contract'' to
``seed company contract'' in section 13(c)(2) to match the term used in
the revised ``base contract price'' definition.
Response: As stated above, the word ``variety'' should not be
changed to ``type.'' In the definition of ``seed company contract,''
which has been renamed as ``processor/seed company contract,'' the word
``variety'' has been retained because varieties, rather than types, are
stated in the processor or seed company contracts. FCIC agrees ``base
price'' should be changed to ``base contract price'' and ``seed pea
processor contract'' should be changed to ``seed company contract.''
Based on a previous comment, FCIC has also revised the phrase ``seed
company contract'' to ``processor/seed company contract.'' This phrase
has also been added to section 13(c)(1).
Comment: One commenter recommended adding a reference to
[[Page 51579]]
``objective, measurable minimum quality requirements'' for mature dry
pea production in proposed section 13(c)(2) to be consistent with the
same language that was added in proposed section 13(c)(1).
Response: FCIC has revised the provision as suggested. FCIC has
also revised proposed section 13(c)(1) by adding the word ``mature''
between the words ``for'' and ``production'' to be consistent with the
same language in proposed section 13(c)(2).
Comment: Two commenters suggested the reference in proposed section
13(d)(1)(iii) should be ``section 13(c) or (3)'' instead of ``section
13I or (e).''
Response: FCIC has revised the provision as suggested.
Comment: Two commenters question if chickpeas are moved from the
Dry Bean policy to the Dry Pea policy whether the reference to the
United States Standards for Whole Dry Peas, Split Peas, and Lentils in
proposed section 13(e)(1)(i) also need to refer to the United States
Standards for Beans as in the Dry Beans policy.
Response: FCIC does not believe the reference to the United States
Standards for Whole Dry Peas, Split Peas, and Lentils also needs to
refer to the United States Standards for Beans. FCIC has provided for
additional grade standards to be specified in the Special Provisions.
Therefore, the United States Standards for Beans can be referenced in
the Special Provisions, if needed. The flexibility of the Special
Provisions also allows for different grade standards if other types,
which require a different grade standard, are added on the Special
Provisions in the future. No change has been made.
Section 14--Prevented Planting
Comment: One commenter recommended eliminating the option to
increase prevented planting coverage levels (in the second sentence),
as well as reviewing the amount that is being paid for prevented
planting purposes.
Response: Since no changes to this section were proposed, the
recommended changes are substantive in nature, and the public was not
provided an opportunity to comment on the recommended changes, the
recommendations cannot be incorporated in the final rule. No change has
been made.
Section 15--Winter Coverage Option
Comment: One commenter supported the change to allow insurance on
fall planted dry peas with a Winter Coverage Option. The commenter
assumes the Winter Coverage Option will be available for qualified
lentil varieties planted in the fall.
Response: FCIC has retained the Winter Coverage Option in the final
rule. Coverage for fall-planted lentils will be available under the
Winter Coverage Option if they are designated as a type on the Special
Provisions and the Winter Coverage Option is available in the county.
Comment: One commenter stated they are supportive of the proposal
to offer the Winter Coverage Option for dry peas and using the language
from the Small Grains Crop Provisions Wheat or Barley Winter Coverage
Endorsement as a starting point for developing similar language for dry
peas. However, the commenter believes some of the language in the
Winter Coverage Endorsement is not appropriate for dry peas and should
be clarified.
Response: As stated above, FCIC has retained the Winter Coverage
Option in the final rule. Based on other comments FCIC has received
regarding the Winter Coverage Option, FCIC has made revisions to
section 15 to ensure the language is appropriate for dry peas.
Comment: One commenter asked if there would be any rules regarding
acreage that is insured under the Winter Coverage Option and is planted
after the fall final planting date. The commenter also asked if the
acreage is still insurable under the Winter Coverage Option or does the
Winter Coverage Option not apply to that acreage.
Response: Acreage planted after the fall final planting date is not
covered under the Winter Coverage Option. However, that acreage is
potentially insurable in the spring provided there is an adequate stand
in the spring. The late planting provisions in the Dry Pea Crop
Provisions are similar to the late planting provisions in the Wheat or
Barley Winter Coverage Endorsement.
Comment: Two commenters stated the opening statement in the Winter
Coverage Option that reads ``(This is a continuous endorsement)'' could
be deleted since this a section of the proposed Dry Pea Crop
Provisions, not a separate endorsement. The commenters also stated if
the phrase, ``(This is a continuous endorsement),'' is not removed,
then ``endorsement'' should be changed to ``option.''
Two commenters also stated the Winter Coverage Option is referred
to as an ``endorsement'' in the opening phrase ``(This is a continuous
endorsement)'' but the more appropriate reference would be an
``option.''
One commenter also stated, since this is a continuous option, there
should be some reference to the possibility of canceling the Winter
Coverage Option without also having to cancel the dry pea coverage
altogether.
Response: The commenters are correct that the phrase, ``(This is a
continuous endorsement),'' is not necessary and has revised the
provisions accordingly. Since the opening phrase has been removed,
there is no need to change the word ``endorsement'' to ``option.''
The commenters are also correct that there should be some reference
to canceling the Winter Coverage Option without also having to cancel
the dry pea coverage altogether. FCIC has added language in section
15(e) to state the option will continue in effect until canceled or
coverage under the Dry Pea Crop Provisions is canceled or terminated.
Comment: Two commenters suggested removing proposed section 15(a).
The commenters asked that since some of the subsections of section 15
state they are ``in lieu of'' other sections of the Dry Pea Crop
Provisions whether there are any remaining that might conflict.
Response: Section 15(a) should not be removed to ensure that the
terms of the Winter Coverage Option control in case FCIC has failed to
catch any other conflicts. Under the priority in the Basic Provisions,
since these provisions are all in the Crop Provisions, they would be
given the same priority without the inclusion of section 15(a).
However, language in redesignated sections 15(g) and 15(h) have been
revised to remove the ``in lieu of'' language as it is no longer
necessary because of the language in section 15(a). Redesignated
sections 15(g) and 15(h) have been revised to be consistent with
provisions in the Wheat or Barley Winter Coverage Endorsement.
Comment: Two commenters asked if it was necessary to state in
proposed section 15(b) CAT level of coverage is not available under
this option when the CAT Endorsement already states no options or
endorsements can apply at the CAT level of coverage.
One commenter stated proposed section 15(b) should be reworded to
state ``This option is not available under Catastrophic Risk Protection
(CAT).''
Response: Section 15(b) is necessary to make it clear because this
is an endorsement offered under the Crop Provisions, not a stand alone
endorsement. However, FCIC has reworded it to specify the insured must
have purchased additional coverage under the Dry Pea Crop Provisions.
Comment: Two commenters stated the statement in proposed section
15(d) that ``You must have a Dry Pea Crop Insurance Policy in effect
and elect to insure the dry pea type under such policy'' is unnecessary
since the
[[Page 51580]]
proposed Winter Coverage Option will be part of the Dry Pea Crop
Provisions, not a separate endorsement like the one for Wheat and
Barley. Also, the reference to insuring ``the dry pea type'' is
confusing, suggesting that producers would be able to insure one type
but not have to insure all dry peas in the county.
One commenter suggested proposed sections 15(d) and (j) seem to be
somewhat repetitive and could either be removed or combined into a
single provision. Since this option is built into the Dry Pea Crop
Provisions, it is obvious that the policy would have to be in effect
and it appears that the intent of earlier sections is that, once the
crop is insured, all insurable acreage of the various dry pea types
planted in the county must be insured.
Response: Proposed section 15(d) is not necessary so FCIC has not
retained that provision in the final rule.
Comment: Two commenters stated it is unclear if the different
references in proposed sections 15(d), (e), (h), (j), (l) and
(l)(3)(iii) to ``dry pea type'' and ``dry pea crop'' are intended or
not. The commenters asked if some or all of these references could be
revised to ``dry peas'' instead.
Response: FCIC has revised the phrases ``dry pea type'' and ``dry
pea crop'' as ``dry peas'' in all cases in section 15, except for
redesignated section 15(k)(3)(iii). ``Dry pea type'' in redesignated
section 15(k)(3)(iii) has been retained because the provisions in that
section pertain to individual dry pea types, rather than all dry peas.
Comment: Two commenters suggested changing the word ``coverage'' to
``option'' in proposed section 15(e).
Response: FCIC has revised the provision as suggested.
Comment: Two commenters stated proposed section 15(e) states ``You
must select this coverage on your application for insurance on or
before the sales closing date * * *'' While 15(h) would change the
contract change date to June 30, the cancellation date to September 30,
and the termination date to November 30, there is no change of the
sales closing date indicated for when the Winter Coverage Option is
elected. The commenters asked if it is intended that Winter Coverage on
dry peas can be applied for on March 15. The commenters stated
according to proposed section 15(f), ``Coverage * * * begins on the
later of the date we accept your application for coverage or on the
fall final planting date * * *'' so an application signed on the March
15 sales closing date would not actually provide winter coverage that
first year.
Response: The producer will be required to elect the Winter
Coverage Option by the fall sales closing date, which will be listed on
the Special Provisions. Coverage under the Winter Coverage Option will
attach on the later of the date the application is accepted or on the
fall final planting date. Section 15 has also been revised by adding a
new paragraph (d) to clarify the Winter Coverage Option is only
available in counties for which the Special Provisions designate both a
fall final planting date and a spring final planting date.
Comment: One commenter expressed a concern about allowing the
producer the ability to change the coverage level or price election
percentage once this option is in effect, since it is a continuous
option. For example, assume a producer elects this option and plants
and insures fall-planted dry peas. The next year the same producer
decides not to plant fall-planted dry peas but the option remains in
effect since it is continuous (assume the producer does not remove it
from the policy). The commenter asked if a producer in this situation
could change the coverage level or percentage of price election up to
the spring sales closing date since no acreage was planted in the fall.
The commenter recommended that producers in this situation be allowed
to make such changes up to the spring sales closing date (especially
since there is a much larger amount of acreage that is planted to
spring types as compared to fall types). The commenter stated this is
allowed in the Small Grains Crop Provisions via the definition of
`Sales Closing Date'. The commenter recommended this be done by either
adding a definition for `Sales Closing Date' or by adding some language
to this effect directly to section 15 to allow these types of changes
to be made in the event that no fall-planted acreage is planted while
this option is still in effect.
Response: The producer should be allowed to make policy changes
until the spring sales closing date if the producer does not have any
insured fall-planted dry pea acreage. Provisions have been added to
section 15(e) to state producers may change their coverage level or
percentage of price election for dry pea types until the spring sales
closing date if the Winter Coverage Option is selected, but they do not
have any insured fall-planted acreage or the fall-planted acreage is
not eligible for this option. Provisions have also been added to
section 15(e) to allow the producer to cancel coverage for any
succeeding crop year by giving written notice on or before the
cancellation date preceding the crop year for which the cancellation of
the option is to be effective. Without this additional language, the
Winter Coverage Option would continue in effect as long as the Dry Pea
Crop Provisions are in effect since the Winter Coverage Option is a
continuous option. This language allows the producer to cancel the
Winter Coverage Option if he desires.
Comment: One commenter stated proposed section 15(g) is
establishing separate optional units for dry peas initially planted in
the fall versus dry peas initially planted in the spring. The commenter
stated they are not aware of any dual types of dry peas and question
whether this provision is even necessary when separate units by type
are currently allowed.
Response: As stated above, there are dual types of dry peas. An
example is Austrian peas (a.k.a. black peas; dry peas with a dark and
mottled seed coat), which are a variety of peas typically characterized
as having moderate to good winter survivability. Their cold temperature
tolerance and subsequent reproductive phase do not have a vernalization
requirement similar to winter wheat. Therefore, they can successfully
be produced when sown in the fall or spring.
Section 15(g) is not needed as the provisions in section 2 already
allow separate units by type and it has been removed. Proposed sections
15(h) through 15(l) have been redesignated as 15(g) through 15(k),
respectively.
Comment: One commenter stated proposed section 15(g) states ``In
addition to the provisions of section 34(b) of the Basic Provisions and
section 2 of the Dry Pea Crop Provisions, optional units may be
established for dry peas if each optional unit contains only dry peas
initially planted in the fall or only dry peas initially planted in the
spring.'' The commenter asked if the fall-planted acreage in a unit is
Austrian Winter peas, and within that same unit, Lentils are planted in
the spring, would these two separate types not be allowed to have
separate optional units since one is fall-planted and one is spring-
planted.
Response: As stated above, FCIC has removed the provisions in
proposed section 15(g). If Austrian peas are planted in the fall and
Lentils are planted in the same unit in the spring, then the Austrian
peas and the Lentils could be separate optional units, provided the
producer elected optional units, since the Austrian peas and the
Lentils are different types.
Comment: One commenter stated since the Winter Coverage Option is
not a separate option to the Dry Pea Crop
[[Page 51581]]
Provisions, the phrase ``section 2 of the Dry Pea Crop Provisions'' in
section 15(g) should be changed to ``section 2 of these Crop
Provisions.''
Response: As stated above, the provisions in section 15(g) have
been removed from the Winter Coverage Option.
Comment: One commenter stated proposed section 15(h) establishes a
separate contract change date, cancellation date, and termination date
for coverage under this option. The commenter assumed the Special
Provisions will also establish a separate sales closing date and
acreage reporting date as well.
Response: Proposed section 15(h) is now section 15(g). The Special
Provisions will provide a separate sales closing date and acreage
reporting date for dry peas covered under the Winter Coverage Option.
Additionally, provisions have been added to section 15(g) to handle
situations that arise when a policy has amounts due and the sales
closing date for the next crop year occurs before the termination date
for the previous crop year. For example, dry peas insured under the
Winter Coverage Option have a fall sales closing date of September 30,
2009 for the 2010 crop year and a termination date of November 30 for
the 2009 crop year. If the insured purchases insurance for dry peas by
September 30, 2009 for the 2010 crop year, and does not pay the premium
by the termination date of November 30, 2009, the dry pea coverage
would be terminated and no coverage would be effective for the 2010
crop year.
Comment: Two commenters stated according to proposed section 15(h),
whenever a producer requests the Winter Coverage Option, the contract
change date is changed to June 30, the cancellation date to September
30, and the termination date to November 30 for ``* * * all your fall
planted and spring planted dry pea crop in the county.'' The commenter
asks whether this means that all future policy changes to the Dry Pea
Crop Provisions will have to be published by the June 30 contract
change date or whether different versions could be in effect for
producers with and without the Winter Coverage Option. The commenter
also asks whether there will be a different sales closing date.
Response: Proposed section 15(h) is now section 15(g). Since the
earliest contract change date is now June 30 for dry peas, all future
policy changes to the Dry Pea Crop Provisions will have to be published
by the June 30 contract change date. There will also be a separate
sales closing date listed on the Special Provisions for fall-planted
acreage under the Winter Coverage Option.
Comment: Two commenters stated the reference to ``Dry Pea Crop
Insurance Provisions'' in proposed section 15(l) should be changed to
``these Crop Provisions'' or ``Dry Pea Crop Provisions'' to be
consistent with the other references in the policy.
Response: FCIC has revised the provision in redesignated section
15(k) to read ``these Crop Provisions.''
Comment: One commenter stated proposed section 15(l)(2) indicates
that if it is not practical to replant to a fall-planted type of dry
peas that the insured must replant to a spring type in order to
maintain coverage based on the fall-planted type. The commenter is
concerned with the various different types of dry peas that could be
insured in some areas and the different level of yields and prices that
can exist between the different types of dry peas (particularly fall
types versus spring types). The commenter recommended that in this
situation the coverage would revert to the respective spring type that
is planted rather than remain based on the fall-planted type, which may
not be reflective of the yield or price potential of the spring-planted
type. In addition, the current language would allow producers the
ability to adversely select against the insurance provider by planting
a lower yielding or priced spring type in these types of situations.
Response: Proposed section 15(l)(2) is now section 15(k)(2). As
stated above, coverage should not revert to the respective spring-
planted type rather than remain based on the fall-planted type.
Allowing spring-planted dry peas to be insured as fall-planted dry peas
when they have been replanted after a failed fall dry pea crop is
permitted because insurance has already attached to the fall dry pea
crop and replanting to the spring crop is a means to mitigate the
damages associated with the failed fall crop. No change has been made.
In addition to the changes described above, FCIC has made the
following changes:
1. Revised the definition of ``contract seed peas'' in section 1 to
remove the phrase ``Dry Peas'' and replace it with the phrase ``Peas
(Pisum sativum L.).'' This revision clarifies contract seed peas are
only insurable if they are of the genera Pisum sativum. The current
phrase ``Dry Peas'' in the definition implies contract seed peas can be
categorized as any dry peas type specified in the definition of ``dry
peas.''
2. Amended proposed section 3 by revising paragraph (a). The
proposed provision states ``In lieu of the requirements of section 3 of
the Basic Provisions'' but should state ``In addition to the
requirements of section 3 of the Basic Provisions.'' The phrase ``In
addition to'' implies section 3 of the Dry Pea Crop Provisions
supplements section 3 of the Basic Provisions; the phrase ``In lieu
of'' implies section 3 of the Dry Pea Crop Provisions replaces section
3 of the Basic Provisions. The intent of the provision is to be a
supplement to the Basic Provisions.
3. Revised the introductory text in redesignated section 13(b) by
revising the phrase ``your pea crop'' to ``your dry pea crop'' and in
redesignated section 13(d) by revising the phrase ``total pea
production'' to ``total dry pea production'' to be consistent with the
terminology used throughout the policy.
4. Revised the examples in redesignated section 13(b) to make them
easier to read.
5. Revised the introductory text in redesignated section 13(d) to
add the word ``dry'' before the word ``pea.'' This change is consistent
with the phrase ``dry pea'' used throughout the policy.
6. Revised the introductory text in redesignated section 13(e) to
be consistent with the introductory text in redesignated sections
13(c)(1) and 13(c)(2).
7. Revised redesignated section 14 to remove the reference to
``limited coverage,'' since it is no longer applicable.
8. Revised section 15(e). The proposed provisions state, ``You must
select this coverage on your application for insurance on or before the
sales closing date.'' This language only addresses how to select the
Winter Coverage Option if producers are applying for coverage; it does
not address how to select the Winter Coverage Option if producers are
renewing their coverage. The revised provisions state, ``You must
select this option on your application for insurance, or on a form
approved by us, on or before the sales closing date for the initial
year in which you wish to insure dry peas under this option.'' This
language distinguishes how producers select the Winter Coverage Option
if they are applying for coverage and if they are renewing their
coverage.
List of Subjects in 7 CFR Part 457
Crop insurance, Dry peas, Reporting and recordkeeping requirements.
Final Rule
0
Accordingly, as set forth in the preamble, the Federal Crop Insurance
Corporation amends 7 CFR part 457 effective for the 2009 and succeeding
crop years as follows:
[[Page 51582]]
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
0
2. Section 457.140 is amended as follows:
0
A. Amend the introductory text by removing ``2003'' and adding ``2009''
in its place;
0
B. Remove the undesignated paragraph immediately preceding section 1;
0
C. In section 1:
0
1. Remove the definition of ``base price'' and add the definition of
``base contract price'' in its place;
0
2. Amend the definition of ``combining'' by removing the word ``place''
and adding the word ``places'' in its place;
0
3. Revise the definition of ``contract seed peas'';
0
4. Revise the definition of ``dry peas'';
0
5. Add a new sentence at the end of the definition for ``harvest'';
0
6. Amend the definition of ``local market price'' by adding the phrase,
``, unless otherwise specified in the Special Provisions'' at the end
of the last sentence;
0
7. Revise the definition of ``nurse crop (companion crop)'';
0
8. Revise the definition of ``practical to replant'';
0
9. Revise the definition of ``price election'';
0
10. Remove the definitions of ``seed company'' and ``seed company
contract'';
0
11. Add definitions for ``processor/seed company'', ``processor/seed
company contract'', ``swathed'', ``type'', and ``windrow''.
0
D. Revise sections 2 and 3;
0
E. Amend section 6 removing the phrase ``seed company'' and adding the
phrase ``processor/seed company'' in its place;
0
F. Revise section 7;
0
G. In section 8, revise paragraph (b) and add paragraphs (c) and (d);
0
H. Amend section 9 by revising the introductory text and paragraph (a)
and by removing the phrase ``normally is harvested'' from paragraph (b)
and adding the phrase ``is normally harvested'' in its place;
0
I. Redesignate sections 11 through 13 as sections 12 through 14,
respectively;
0
J. Add a new section 11;
0
K. Revise newly redesignated section 12;
0
L. In newly redesignated section 13:
0
1. Throughout the section, remove the phrases ``section 12'' and
``sections 12'' and add the phrases ``section 13'' and ``sections 13''
in their place, respectively;
0
2. Revise paragraph (a);
0
3. Amend the introductory text of paragraph (b) by adding the word
``dry'' before the word ``pea'';
0
4. Amend paragraph (b)(5) by adding the word ``contract'' after the
word ``base'';
0
5. Revise the examples in paragraph (b);
0
6. Revise paragraph (c)(1) introductory text;
0
7. Amend paragraph (c)(1)(i) by adding the word ``contract'' after the
word ``base'';
0
8. Revise the introductory text in paragraph (c)(2);
0
9. Amend the introductory text in paragraph (d) by adding the word
``dry'' after the word ``total'';
0
10. Amend paragraph (d)(1)(iii) by removing the phrase ``, excluding
Austrian Winter Peas,'';
0
11. Revise paragraph (e) introductory text and (e)(1) introductory
text.
0
M. Amend newly redesignated section 14 of Sec. 457.140 by removing the
phrase ``limited or''; and
0
N. Add a new section 15.
The additions and revisions read as follows:
Sec. 457.140 Dry pea crop insurance provisions.
* * * * *
1. Definitions.
* * * * *
Base contract price. The price per pound stipulated in the
processor/seed company contract without regard to discounts or
incentives that may apply, and that will be paid to the producer for at
least 50 percent of the total production under contract with the
processor/seed company.
* * * * *
Contract seed peas. Peas (Pisum sativum L.) grown under the terms
of a processor/seed company contract for the purpose of producing seed
to be used in planting a future year's crop.
Dry peas. Peas (Pisum sativum L.), Austrian Peas (Pisum sativum spp
arvense), Lentils (Lens culinaris Medik.), Chickpeas (Cicer arietinum
L.), and other types as listed on the Special Provisions.
* * * * *
Harvest. * * * Dry peas that are swathed prior to combining are not
considered harvested.
* * * * *
Nurse crop (companion crop). A crop planted into the same acreage
as another crop to improve the growing conditions for the crop with
which it is grown, and that is intended to be harvested separately.
* * * * *
Practical to replant. In addition to the definition contained in
the Basic Provisions, it will not be considered practical to replant:
(a) Contract seed peas unless the processor/seed company will
accept the production under the terms of the processor/seed company
contract.
(b) Fall-planted dry peas more than 25 days after the final
planting date for the corresponding spring-planted type of dry peas.
(c) All other dry peas more than 25 days after the final planting
date unless replanting is generally occurring in the area.
Price election. In addition to the provisions of the definition
contained in the Basic Provisions, the price election for contract seed
peas will be the percentage you elect (not to exceed 100 percent) of
the base contract price and used for the purposes of determining
premium and indemnity for contract seed peas under this policy.
Processor/seed company. Any business enterprise regularly engaged
in the processing of contract seed peas, that possesses all licenses
and permits for marketing contract seed peas required by the state in
which it operates, and that owns, or has contracted, sufficient drying,
screening, and bagging or packaging equipment to accept and process the
contract seed peas within a reasonable amount of time after harvest.
Processor/seed company contract. A written agreement between the
producer and the processor/seed company, executed by the acreage
reporting date, containing at a minimum:
(a) The producer's promise to plant and grow one or more specific
varieties of contract seed peas, and deliver the production from those
varieties to the processor/seed company;
(b) The processor/seed company's promise to purchase all the
production stated in the contract; and
(c) A fixed price, or a method to determine such price based on
published information compiled by a third party, that will be paid to
the producer for at least 50 percent of the production stated in the
contract.
Swathed. Severance of the stem and pods from the ground without
removal of the seeds from the pods and placing them into windrows.
Type. A category of dry peas identified as a type in the Special
Provisions.
Windrow. Dry peas where the plants are cut and placed in a row.
[[Page 51583]]
2. Unit Division.
In addition to, or instead of, establishing optional units by
section, section equivalent, or FSA farm serial number and by irrigated
and non-irrigated acreage as provided in the unit division provisions
contained in the Basic Provisions, separate optional units may be
established for each dry pea type as specified on the Special
Provisions. Contract seed peas and dry pea types not grown under a
processor/seed company contract may qualify for separate optional units
even if they share a common variety provided each dry pea type is grown
on separate acreage and the production is kept separate.
3. Insurance Guarantees, Coverage Levels, and Prices for
Determining Indemnities.
(a) In accordance with the requirements of section 3(b)(1) of the
Basic Provisions, you may select only one coverage level for each type
listed on the Special Provisions. However, if you elect the
Catastrophic Risk Protection (CAT) level of insurance for any dry pea
type, the CAT level of coverage will be applicable to all insured dry
pea acreage in the county.
(b) In addition to the requirements of section 3 of the Basic
Provisions:
(1) If the Special Provisions do not designate separate price
elections by type, you may select only one price election for all dry
peas in the county insured under this policy.
(2) If the Special Provisions designate separate price elections by
type, you may select one price election for each dry pea type so
designated in the Special Provisions even if the prices for each type
are the same. The price elections you choose for each type are not
required to 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 may choose 75 percent of
the maximum price election for another type.
(c) In addition to the requirements of section 3 of the Basic
Provisions, in counties with both a fall and spring sales closing date
for the insured crop:
(1) If you do not have any insured fall-planted dry pea acreage
covered under the Winter Coverage Option, you may change your coverage
level or percentage of price election until the spring sales closing
date; or
(2) If you have any insured fall-planted dry pea acreage covered
under the Winter Coverage Option, you may not change your coverage
level or percentage of price election after the fall sales closing
date.
(d) If a dry pea type is added after the sales closing date, we
will assign:
(1) A coverage level equal to the lowest coverage level you
selected for any other dry pea types; and
(2) A price election percentage equal to:
(i) 100 percent of the price election if you elected additional
coverage; and
(ii) 55 percent of the price election if you elected catastrophic
level of coverage.
* * * * *
7. Insured Crop.
(a) In accordance with section 8 of the Basic Provisions, the crop
insured will be all the dry pea types in the county for which a premium
rate is provided by the actuarial documents:
(1) In which you have a share;
(2) That are planted for harvesting once maturity is reached as:
(i) Dry peas; or
(ii) Contract seed peas, if the processor/seed company contract is
executed on or before the acreage reporting; and
(3) That are not (unless allowed by the Special Provisions or by
written agreement):
(i) Interplanted with another crop;
(ii) Planted into an established grass or legume;
(iii) Planted as a nurse crop; or
(iv) Planted to plow down, graze, harvest as hay, or otherwise not
harvest as a mature dry pea crop.
(b) You will be considered to have a share in the insured crop if,
under the processor/seed company contract, you retain control of the
acreage on which the dry peas are grown, you are at risk of loss (i.e.,
if there is a reduction in quantity or quality of your dry pea
production, you will receive less income under the contract), and the
processor/seed company contract is in effect for the entire insurance
period.
(c) In counties for which the actuarial documents provide premium
rates for the Winter Coverage Option (see section 15), coverage is
available for dry peas between the time coverage begins and the spring
final planting date. Coverage under the option is effective only if you
qualify under the terms of the option and you elect the option by the
sales closing date.
8. Insurable Acreage.
* * * * *
(b) Any acreage of the insured crop damaged before the final
planting date, to the extent that producers in the surrounding area
would normally not further care for the crop, must be replanted unless
we agree that it is not practical to replant.
(c) Whenever the Special Provisions designate both fall and spring
final planting dates:
(1) Any fall-planted dry peas that is damaged before the spring
final planting date, to the extent that growers in the area would
normally not further care for the crop, must be replanted to a fall-
planted type of dry peas to maintain insurance based on the fall-
planted type unless we agree that replanting is not practical. If it is
not practical to replant to a fall-planted type of dry peas but it is
practical to replant to a spring-planted type, you must replant to a
spring-planted type to keep your insurance coverage based on the fall-
planted type in force.
(2) Any fall-planted dry pea acreage that is replanted to a spring-
planted type when it was practical to replant the fall-planted type
will be insured as the spring-planted type and the production
guarantee, premium and price election applicable to the spring-planted
type will be used. In this case, the acreage will be considered to be
initially planted to the spring-planted type.
(3) Notwithstanding section 8(d)(1) and (2), if you have elected
coverage under the Winter Coverage Option (if available in the county),
insurance will be in accordance with the option.
(d) Whenever the Special Provisions designate only a spring final
planting date, any acreage of a fall-planted dry pea crop is not
insured unless you request such coverage on or before the spring sales
closing date, and we agree in writing that the acreage has an adequate
stand in the spring to produce the yield used to determine your
production guarantee.
(1) The fall-planted dry pea crop will be insured as a spring-
planted type for the purpose of the production guarantee, premium and
price election.
(2) Insurance will attach to such acreage on the date we determine
an adequate stand exists or on the spring final planting date if we do
not determine adequacy of the stand prior to the spring final planting
date.
(3) Any acreage of such fall-planted dry peas that is damaged after
it is accepted for insurance but before the spring final planting date,
to the extent that growers in the area would normally not further care
for the crop, must be replanted to a spring-planted type of dry pea
unless we agree it is not practical to replant. No replanting payment
will be made.
(4) If fall-planted acreage is not to be insured it must be
recorded on the acreage report as uninsured fall-planted acreage.
9. Insurance Period.
[[Page 51584]]
In accordance with the provisions of section 11 of the Basic
Provisions, and subject to the provisions provided by the Winter
Coverage Option (see section 15) if you elect such option, the
insurance period is as follows:
(a) Coverage for fall-planted dry peas not covered by the Winter
Coverage Option will begin on the earlier of April 15 or the date we
agree to accept the acreage for insurance, but not before March 1,
unless otherwise specified on the Special Provisions.
* * * * *
11. Replanting Payments.
(a) A replanting payment is allowed as follows:
(1) In lieu of provisions in section 13 of the Basic Provisions
that limit the amount of a replant payment to the actual cost of
replanting, the amount of any replanting payment will be determined in
accordance with these Crop Provisions;
(2) You must comply with all requirements regarding replanting
payments contained in section 13 of the Basic Provisions (except as
allowed in section 11(a)(1)) and in the Winter Coverage Option (see
section 15), if applicable;
(3) The insured crop 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;
(4) The acreage must have been initially planted to a spring type
of the insured crop in those counties with only a spring final planting
date;
(5) When the Winter Coverage Option is in effect for the acreage,
damage must occur after the fall final planting date in those counties
where both a fall and spring final planting date are designated;
(6) Replanting payments are not available for damaged fall planted
dry pea acreage if you have not elected to cover such acreage under the
Winter Coverage Option; and
(7) The replanted crop must be seeded at a rate sufficient to
achieve a total (undamaged and new seeding) plant population that will
produce at least the yield used to determine your production guarantee.
(b) The maximum amount of the replanting payment per acre will be
the lesser of 20.0 percent of the production guarantee or 200 pounds,
multiplied by your price election, multiplied by your share, unless
otherwise stated in the Special Provisions.
(c) When the crop is replanted using a practice that is uninsurable
for an original planting, the liability on the unit will be reduced by
the amount of the replanting payment. The premium amount will not be
reduced.
(d) Replanting payments will be calculated using the price election
and production guarantee for the dry pea type that is replanted and
insured. For example, if damaged smooth green and yellow pea acreage is
replanted to lentils, the price election and production guarantee
applicable to lentils will be used to calculate any replanting payment
that may be due. A revised acreage report will be required to reflect
the replanted type. Notwithstanding the previous two sentences, the
following will have a replanting payment based on the guarantee and
price election for the crop type initially planted:
(1) Any damaged fall-planted type of dry peas replanted to a
spring-planted type that retains insurance based on the production
guarantee and price election for the fall-planted type; and
(2) Any acreage replanted at a reduced seeding rate into a
partially damaged stand of the insured crop.
12. Duties in the Event of Damage or Loss.
Representative samples are required in accordance with section 14
of the Basic Provisions.
13. Settlement of Claim.
(a) We will determine your loss on a unit basis. In the event you
are unable to provide records of production that are acceptable to us
for any:
(1) Optional units, we will combine all optional units for which
acceptable records of production were not provided; or
(2) Basic units, we will allocate any commingled production to such
units in proportion to our liability on the harvested acreage for the
units.
(b) * * *
* * * * *
For example:
In this example, you have not elected optional units by type. You
have a 100 percent share in 100 acres of spring-planted smooth green
dry edible peas in the unit, with a 70 percent guarantee of 4,000
pounds per acre and a price election of $0.09 per pound. Your selected
price election percentage is 100 percent. You are only able to harvest
200,000 pounds. Your indemnity would be calculated as follows:
(1) 100 acres x 4,000 pounds = 400,000-pound guarantee;
(2) 400,000-pound guarantee x $0.09 price election = $36,000.00
value of guarantee;
(9) 200,000-pound production to count x $0.09 price election =
$18,000.00 value of production to count;
(12) $36,000.00 value of guarantee - $18,000.00 value of production
to count = $18,000.00 loss; and
(13) $18,000.00 x 100 percent share = $18,000.00 indemnity payment.
You also have a 100 percent share in 100 acres of contract seed
peas in the same unit, with a 65 percent guarantee of 5,000 pounds per
acre and a base contract price of $0.40 per pound. Your selected price
election percentage is 75 percent. You are only able to harvest 450,000
pounds. Your total indemnity for both spring-planted smooth green dry
edible peas and contract seed peas would be calculated as follows:
(1) 100 acres x 4,000 pounds = 400,000-pound guarantee for the
spring-planted smooth green dry edible pea type;
(2) 400,000-pound guarantee x $0.09 price election = $36,000.00
value of guarantee for the spring-planted smooth green dry edible pea
type;
(4) 100 acres x 5,000 pounds = 500,000-pound production to count
for the contract seed pea type;
(5) 500,000-pound guarantee x $0.40 base contract price =
$200,000.00 gross value of guarantee for the contract seed pea type;
(6) $200,000 x .75 price election percentage = $150,000 net value
of guarantee for the contract seed pea type;
(8) $36,000.00 + $150,000.00 = $186,000.00 total value of
guarantee;
(9) 200,000-pound production to count x $0.09 price election =
$18,000.00 value of production to count for the spring-planted smooth
green dry edible pea type;
(10) 450,000-pound production to count x $0.30 = $135,000.00 value
of production to count for the contract seed pea type;
(11) $18,000.00 + $135,000.00 = $153,000.00 total value of
production to count;
(12) $186,000.00 - $153,000.00 = $33,000.00 loss; and
(13) $33,000.00 loss x 100 percent share = $33,000.00 indemnity
payment.
(c) * * *
(1) For mature production meeting the objective, measurable minimum
quality requirements (e.g., size, germination percentage) contained in
the processor/seed company contract, and for mature production that
does not meet such requirements due to uninsured causes:
* * * * *
(2) For mature production not meeting the objective, measurable
minimum quality requirements (e.g., size, germination percentage)
contained in the processor/seed company contract, due to insurable
causes, and immature production that is appraised:
* * * * *
[[Page 51585]]
(e) Mature dry pea production that does not qualify as contract
seed peas under the policy terms or does not meet the objective,
measurable minimum quality requirements (e.g., size, germination
percentage) contained in the processor/seed company contract, may be
adjusted for quality deficiencies.
(1) Production will be eligible for quality adjustment in
accordance with the following, unless otherwise specified in the
Special Provisions:
* * * * *
15. Winter Coverage Option.
(a) In the event of a conflict between this section and sections 1
through 14 of these Crop Provisions, this section will control.
(b) You must have purchased additional coverage under the Dry Pea
Crop Provisions in order to select this option.
(c) In return for payment of the additional premium designated in
the actuarial documents, this option is available in counties for which
the actuarial documents provide premium rates for the Winter Coverage
Option.
(d) This option is available only in counties for which the Special
Provisions designate both a fall final planting date and a spring final
planting date.
(e) You must select this option on your application for insurance,
or on a form approved by us, on or before the sales closing date for
the initial year in which you wish to insure dry peas under this
option.
(1) Failure to do so means you have rejected this coverage for the
dry pea crop planted in the fall and this option is void.
(2) This option will continue in effect until canceled or coverage
under the Dry Pea Crop Provisions is canceled or terminated.
(3) This option may be canceled by you or us for any succeeding
crop year by giving written notice to the other party on or before the
cancellation date contained in section 15(g) preceding the crop year
for which the cancellation of this option is to be effective.
(4) You may change your coverage level or percentage of price
election for dry pea types until the spring sales closing date if you
have selected this option, but do not have any insured fall planted
acreage or your fall planted acreage is not eligible for this option.
(f) Coverage under this option begins on the later of the date we
accept your application for coverage or on the fall final planting date
designated in the Special Provisions. Coverage ends on the spring final
planting date designated in the Special Provisions.
(g) If you elect this option for dry peas initially planted in the
fall, the following dates will be applicable to all your fall-planted
and spring-planted dry peas in the county:
(1) Contract change date is June 30 preceding the cancellation
date;
(2) Cancellation date is September 30; and
(3) Termination date is November 30. For a policy with amounts due,
when the sales closing date is prior to the previous crop year
termination date, such policies will terminate for the current crop
year even if insurance attached prior to the termination date. Such
termination will be considered effective as of the sales closing date
and no insurance will be considered to have attached for the crop year
and no indemnity, prevented planting or replant payment will be owed.
(h) All notices of damage must be provided to us not later than 15
days after the spring final planting date designated in the Special
Provisions.
(i) All insurable acreage of each fall planted dry pea type covered
under this option must be insured.
(j) The amount of any indemnity paid under the terms of this option
will be subject to any reduction specified in the Basic Provisions for
multiple crop benefits in the same crop year.
(k) Whenever any acreage of dry peas planted in the fall is damaged
during the insurance period and at least 20 acres or 20 percent of the
insured planted acreage in the unit, whichever is less, does not have
an adequate stand to produce at least 90 percent of the production
guarantee for the acreage, you may, at your option, take one of the
following actions:
(1) Continue to care for the damaged dry peas. By doing so,
coverage will continue under the terms of the Basic Provisions, these
Crop Provisions and this option;
(2) Replant the acreage to an appropriate type of insured dry peas,
if it is practical, and receive a replanting payment in accordance with
the terms of section 11. By doing so, coverage will continue under the
terms of the Basic Provisions, these Crop Provisions and this option,
and the production guarantee for the dry pea type planted in the fall
will remain in effect; or
(3) Destroy the remaining crop on such acreage:
(i) By destroying the remaining crop, you agree to accept an
appraised amount of production determined in accordance with section
13(d)(1) of these Crop Provisions to count against the unit production
guarantee. This amount will be considered production to count in
determining any final indemnity on the unit and will be used to settle
your claim as described in section 13.
(ii) You may use such acreage for any purpose, including planting
and separately insuring any other crop if such insurance is available.
(iii) If you elect to plant and elect to insure spring-planted dry
pea acreage of the same dry pea type (you must elect whether or not you
want insurance on the spring-planted acreage of the same dry pea type
at the time we release the fall-planted acreage), you must pay
additional premium for insurance. Such acreage will be insured in
accordance with the policy provisions that are applicable to acreage
that is initially planted in the spring to the same dry pea type, and
you must:
(A) Plant the spring-planted acreage in a manner which results in a
clear and discernable break in the planting pattern at the boundary
between it and any remaining acreage of the fall-planted dry pea
acreage; and
(B) Store or market the production in a manner which permits us to
verify the amount of spring-planted production separately from any
fall-planted production. In the event you are unable to provide records
of production that are acceptable to us, the spring-planted acreage
will be considered to be a part of the original fall-planted unit.
Signed in Washington, DC, on August 26, 2008.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
[FR Doc. E8-20128 Filed 9-3-08; 8:45 am]
BILLING CODE 3410-08-P
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/ 2008
/ September
/ Thursday, September 04, 2008
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