[Federal Register: March 29, 2004 (Volume 69, Number 60)]
[Proposed Rules]
[Page 16181-16186]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr04-14]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
Common Crop Insurance Regulations; Apple Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
[[Page 16182]]
ACTION: Proposed rule with request for comments.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to
amend the Apple Crop Insurance Provisions. The intended effect of this
action is to provide policy changes and clarify existing policy
provisions to better meet the needs of the insureds and to restrict the
effect of the current Apple Crop Insurance Regulations to the 2004 and
prior crop years.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business April 28, 2004 and will be considered
when the rule is to be made final.
ADDRESSES: Interested persons are invited to submit written comments to
the Director, Product Development Division, Risk Management Agency,
United States Department of Agriculture, 6501 Beacon Drive, Stop 0812,
Room 421, Kansas City, MO 64133-4676. Comments titled ``Apple Crop
Provisions'' may be sent via the Internet to DirectorPDD@rma.usda.gov,
or the Federal eRulemaking Portal: http://www.regulations.gov. Follow
the online instructions for submitting comments. A copy of each
response will be available for public inspection and copying from 7
a.m. to 4:30 p.m., CDT, Monday through Friday except holidays, at the
above address.
FOR FURTHER INFORMATION CONTACT: Gary Johnson, Risk Management
Specialist, Research and Development, Product Development Division,
Risk Management Agency, at the Kansas City, MO, address listed above,
telephone (816) 926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
rule is not significant for the purpose of Executive Order 12866 and,
therefore, it has not been reviewed by OMB.
Paperwork Reduction Act of 1995
Pursuant to the 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 through February 28, 2005.
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, or a notice of loss and production information to
determine an indemnity payment in the event of an insured cause of crop
loss. Whether a producer has 10 acres or 1000 acres, there is no
difference in the kind of information collected. To ensure crop
insurance is available to small entities, the Federal Crop Insurance
Act authorizes FCIC to waive collection of administrative fees from
limited resource farmers. FCIC believes this waiver helps to ensure
small entities are given the same opportunities 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 action taken by FCIC under
the terms of the crop insurance policy, the administrative appeal
provisions published at 7 CFR part 11 or 7 CFR 400.169, as applicable,
must be exhausted before any action for judicial review of any
determination or action by FCIC may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
Background
FCIC proposes to amend the Common Crop Insurance Regulations (7 CFR
part 457) by amending Sec. 457.158 Apple Crop Insurance Provisions
effective for the 2005 and succeeding crop years. The changes to the
provisions for insuring apples are as follows:
1. Section 1--Add definitions for the terms ``apple production,''
``fresh apple production,'' ``processed apple production,'' ``damaged
apple production,'' ``mature,'' and ``type''. The definition of
``harvest'' has been revised to clarify that apples collected from the
ground that cannot be sold for human consumption will not be considered
harvested. The definition of ``marketable'' has been revised to conform
to the new standards for apples considered damaged.
2. Section 2--Revise section 2 to incorporate the provisions
previously contained in section 14 for clarity and to conform to the
elimination of some of the options previously available under the
policy.
3. Section 3--Move the requirement to report acreage by varietal
group to the acreage reporting date to be consistent with the
requirement that the insured report their types on the acreage report.
4. Section 4--The contract change date in California has been
changed to October 1 to conform to the changes in the insurance period
for California.
5. Section 5--Add provisions to clarify that an insurance provider
may not cancel an insured's policy when an insured cause of loss has
occurred after insurance attached, but prior to the cancellation and
termination date.
6. Section 6--Revise the reporting requirements to require the
insured to report and designate all acreage grown for fresh apples and
all acreage grown for processing apples, by varietal group, by the
acreage reporting date to ensure that the proper price is used to value
the production.
7. Section 9--Add provisions to specify that if the insured policy
is canceled or terminated for any crop year after insurance attached
for that crop year, but on or before the cancellation and termination
dates, whichever is later, then insurance will be considered to not
have attached for that year and no premium, administrative fee, or
indemnity will be due. Add provisions to allow a different insurance
period for California because the varieties grown there are typically
harvested later than other varieties.
8. Section 10--Revise the provision to specify that unavoidable
hail, wind, sunburn, and russeting caused by frost or freeze will now
be a covered cause
[[Page 16183]]
of loss without the need to purchase a specific option.
9. Section 12--Clarify that value of the production guarantee is
also calculated by variety as well as type.
10. Replaced provisions of the previous sections 13 (Optional
Coverage for Quality Adjustment) and section 14 (Option C--Prices and
Units by Varietal Group) with a new section 14 (Optional Coverage for
Fresh Fruit Quality Adjustment) to provide quality adjustments for all
perils. This modification eliminates several options under the current
program and simplifies the apple crop insurance program. In addition,
an example was added for clarification of the Optional Coverage for
Fresh Quality Adjustment.
List of Subjects in 7 CFR Part 457
Crop insurance, Apple, Reporting and record keeping requirements.
Proposed Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation proposes to amend 7 CFR part 457, Common Crop
Insurance Regulations, for the 2005 and succeeding crop years as
follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(p).
2. Revise Sec. 457.158 to read as follows:
Sec. 457.158 Apple crop insurance provisions.
The Apple Crop Insurance Provisions for the 2005 and succeeding
crop years are as follows:
1. Definitions
Apple production. All production of fresh apples and processing
apples from the insurable acreage.
Area A. A geographic area that includes Montana, Wyoming, Utah, New
Mexico and all states west thereof.
Area B. A geographic area that includes all states not included in
Area A, except for Colorado.
Area C. Colorado.
Bin. A container that contains a minimum of 875 pounds of apples or
another quantity if so designated in the Special Provisions.
Box. A container that contains 35 pounds of apples or another
quantity if so designated in the Special Provisions.
Bushel. In all states except Colorado, 42 pounds of apples. In
Colorado, 40 pounds of apples.
Damaged apple production.
A. With respect to losses calculated under section 12 only, the
percentage of fresh or processing apple production that fails to grade
U.S. No. 1 Processing or better in accordance with the United States
Standards for Grades of Apples for processing, or such other standard
contained on the Special Provisions, within each lot, bin, bushel or
box, as applicable; or
B. With respect to losses calculated under sections 12 and 14--The
percentage of fresh apple production that fails to grade U.S. Fancy or
better in accordance with the United States Standards for Grades of
Apples, or such other standard contained on the Special Provisions,
within each lot, bin, bushel or box, as applicable.
Direct marketing. Sale of the insured crop directly to consumers
without the intervention of an intermediary such as a wholesaler,
retailer, packer, processor, shipper, buyer or broker. Examples of
direct marketing include selling through an on-farm or roadside stand,
or a farmer's market, and permitting the general public to enter the
field for the purpose of picking all or a portion of the crop.
Fresh apples. Apple production reported from acreage that is
intended to be marketed for fresh consumption and is reported as fresh
on the acreage report and grades U.S. Fancy or better in accordance
with the United States Standards for Grades of Apples, or such other
standard contained on the Special Provisions.
Harvest. The picking of mature apples from the trees or collecting
of mature apples from the ground. Mature apples that are collected from
the ground but cannot be sold for human consumption will not be
considered harvested.
Lot. A quantity of production that can be separated from other
quantities of production by grade characteristics, load, location or
other distinctive features.
Marketable. Apple production that is not damaged apple production.
Mature. Having reached the full natural growth or development, at
which time harvest normally takes place.
Non-contiguous. Any two or more tracts of land whose boundaries do
not touch at any point, except that land separated only by a public or
private right-of-way, waterway, or an irrigation canal will be
considered as contiguous.
Processing apples. Apple production from acreage that is intended
to be marketed for processing and is reported as processing on the
acreage report, and grades U.S. No.1 Processing or better in accordance
with the United States Standards for Grades of Apples for Processing,
or such other standard contained on the Special Provisions.
Production guarantee (per acre). The quantity of apples in bushels,
bins, or boxes, determined by multiplying the approved APH yield per
acre by the coverage level percentage you elect.
Russeting. The same meaning as the definition of ``russeting''
contained in the United States Standards for Grades of Apples, or such
other standard contained on the Special Provisions.
Sunburn. The same meaning as the definition of ``sunburn''
contained in the United States Standards for Grades of Apples, or such
other standard contained on the Special Provisions.
Type. Either fresh or processing apples.
Varietal group. Apple varieties with similar characteristics that
are grouped for insurance purposes as specified in the Special
Provisions.
2. Unit Division
(a) In addition to the requirements of section 34(b) of the Basic
Provisions, optional units may be established if each optional unit is:
(1) Located on non-contiguous land; and
(2) By varietal group;
(b) Optional units may only be established if the following
conditions are met:
(1) You have not elected to insure your apples under the
Catastrophic Risk Protection (CAT) Endorsement; and
(2) You have maintained separate production records for each
optional unit and you can identify the acreage upon which the apples
are produced.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining
Indemnities
In addition to the requirements of section 3 of the Basic
Provisions:
(a) You may select only one price election for all the apples in
the county insured under this policy unless the Special Provisions
provide different price elections by type or varietal group, in which
case you may select one price election for each apple type or varietal
group designated in the Special Provisions. The price elections you
choose for each type or varietal group must have the same percentage
relationship to the maximum price offered by us for each type or
varietal group. For example, if you choose 100 percent of the maximum
price election for one type or varietal group, you must also choose 100
percent of the maximum price election for all other types or varietal
groups.
(b) You must report, by the production reporting date designated in
section 3 of the Basic Provisions, by type or varietal group if
applicable:
[[Page 16184]]
(1) Any damage, removal of trees, change in practices, or any other
circumstance that may reduce the expected yield below the yield upon
which the insurance guarantee is based, and the number of affected
acres;
(2) The number of bearing trees on insurable and uninsurable
acreage;
(3) The age of the trees and the planting pattern; and
(4) For the first year of insurance for acreage interplanted with
another perennial crop, and anytime the planting pattern of such
acreage has changed:
(i) The age of the interplanted crop, and type if applicable;
(ii) The planting pattern; and
(iii) Any other information that we request in order to establish
your approved yield.
(c) We will reduce the yield used to establish your production
guarantee as necessary, based on our estimate of the effect of the
following: interplanted perennial crop; removal of trees; damage;
change in practices and any other circumstance on the yield potential
of the insured crop. If you fail to notify us of any circumstance that
may reduce your yields from previous levels, we will reduce your
production guarantee as necessary at any time we become aware of the
circumstance.
(d) You may not increase your elected or assigned coverage level or
the ratio of your price election to the maximum price election if a
cause of loss that could or would reduce the yield of the insured crop
has occurred prior to the time that you request the increase.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is October 31 preceding the cancellation for California and
August 31 preceding the cancellation date for all other states.
5. Cancellation and Termination Dates
(a) In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are January 31 in California and
November 20 in all other states.
(b) If your apple policy is canceled or terminated by us for any
crop year, in accordance with the terms of the policy, after insurance
attached for that crop year, but on or before the cancellation and
termination dates whichever is later, insurance will be considered to
not have attached for that crop year and no premium, administrative
fee, or indemnity will be due for such crop year.
(c) We may not cancel your policy when an insured cause of loss has
occurred after insurance attached, but prior to the cancellation date.
However, your policy can be terminated if a cause for termination
contained in sections 2 or 27 of the Basic Provisions exists.
6. Report of Acreage
In addition to the requirements contained in the section 6 of the
Basic Provisions, you must report and designate all acreage by type and
varietal group by the acreage reporting date.
7. Insured Crop
In accordance with section 8 of the Basic Provisions, the crop
insured will be all the apples in the county for which a premium rate
is provided by the actuarial table:
(a) In which you have a share;
(b) That are grown on tree varieties that:
(1) Are adapted to the area; and
(2) Are in area A and have produced at least an average of 10 bins
of apples per acre; or
(3) Are in area B and have produced at least an average of 150
bushels of apples per acre; or
(4) Are in area C and have produced at least an average of 200
bushels of apples per acre; and
(c) That are grown in an orchard that, if inspected, is considered
acceptable by us.
8. Insurable Acreage
In lieu of the provisions in section 9 of the Basic Provisions that
prohibit insurance from attaching to a crop planted with another crop,
apples interplanted with another perennial crop are insurable unless we
inspect the acreage and determine that it does not meet the
requirements contained in your policy.
9. Insurance Period
(a) In accordance with the provisions of section 11 of the Basic
Provisions:
(1) For the year of application in California, coverage begins on
February 1 of the calendar year the insured crop normally blooms. In
all other states, coverage begins November 21 of the calendar year
prior to the calendar year the insured crop normally blooms, except
that, if your application is received by us after January 12 but prior
to February 1 in California, or after November 1 but prior to November
21 in all other states, insurance will attach on the 20th day after
your properly completed application is received in our local office,
unless we inspect the acreage during the 20 day period and determine
that it does not meet insurability requirements. You must provide any
information that we require for the crop or to determine the condition
of the apple acreage.
(2) For each crop year subsequent to the year of application, that
the policy remains continuously in force, coverage begins on the day
immediately following the end of the insurance period for the prior
crop year. Policy cancellation that results solely from transferring an
existing policy to a different insurance provider for a subsequent crop
year will not be considered a break in continuous coverage.
(3) For California, the calendar date for the end of the insurance
period for each crop year is November 5, or such other date as
specified in the Special Provisions. For all other states, the calendar
date for the end of the insurance period for each crop year is November
20.
(4) Cancellation and termination provisions that pertain to the
period after insurance has attached, but prior to the cancellation and
termination date, are contained in section 5 of these crop provisions.
(b) In addition to the provisions of section 11 of the Basic
Provisions:
(1) If you acquire an insurable share in any insurable acreage
after coverage begins but on or before the acreage reporting date for
the crop year, and after an inspection we consider the acreage
acceptable, insurance will be considered to have attached to such
acreage on the calendar date for the beginning of the insurance period.
There will be no coverage of any insurable interest acquired after the
acreage reporting date.
(2) If you relinquish your insurable share on any insurable acreage
of apples on or before the acreage reporting date for the crop year,
insurance will not be considered to have attached to, and no premium or
indemnity will be due for such acreage for that crop year unless:
(i) A transfer of coverage and right to an indemnity, or a similar
form approved by us, is completed by all affected parties;
(ii) We are notified by you or the transferee in writing of such
transfer on or before the acreage reporting date; and
(iii) The transferee is eligible for crop insurance.
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided only against the following causes of
loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not been
[[Page 16185]]
controlled or pruning debris has not been removed from the orchard;
(3) Earthquake;
(4) Volcanic eruption;
(5) Failure of irrigation water supply, if caused by an insured
peril that occurs during the insurance period;
(6) Wildlife; and
(7) All other natural causes of loss that cannot be prevented,
including, but not limited to hail, wind, sunburn, and russeting caused
by frost or freeze.
(b) In addition to the causes of loss excluded in section 12 of the
Basic Provisions, we will not insure against damage or loss of
production due to:
(1) Disease or insect infestation, unless adverse weather:
(i) Prevents the proper application of control measures or causes
properly applied control measures to be ineffective; or
(ii) Causes disease or insect infestation for which no effective
control mechanism is available;
(2) Inability to market the apples for any reason other than actual
physical damage from an insurable cause specified in this section. For
example, we will not pay you an indemnity if you are unable to market
due to quarantine, boycott, or refusal of any person to accept
production.
11. Duties in the Event of Damage or Loss
In addition to the requirements of section 14 of the Basic
Provisions, the following will apply:
(a) You must notify us within 3 days of the date harvest should
have started if the crop will not be harvested.
(b) You must notify us at least 15 days before any production from
any unit will be sold by direct marketing. We will conduct an appraisal
that will be used to determine your production to count for production
that is sold by direct marketing. If damage occurs after this
appraisal, we will conduct an additional appraisal. These appraisals,
and any acceptable records provided by you, will be used to determine
your production to count. Failure to give timely notice that production
will be sold by direct marketing will result in an appraised amount of
production to count of not less than the production guarantee per acre
if such failure results in our inability to make the required
appraisal.
(c) If you intend to claim an indemnity on any unit, you must
notify us at least 15 days prior to the beginning of harvest or
immediately if damage is discovered during harvest. You must not sell
or dispose of the damaged crop until after we have given you written
consent to do so. If you fail to meet the requirements of this section
and such failure results in our inability to inspect the damaged
production, we may consider all such production to be undamaged and
include it as production to count.
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 unit, we will combine all optional units for
which such production records were not provided; or
(2) For any basic unit, we will allocate any commingled production
to such units in proportion to our liability on the harvested acreage
for 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 or varietal group as applicable;
(2) Multiplying each result in section 12(b)(1) by the respective
price election;
(3) Totaling the results in section 12(b)(2) if there are more than
one type or varietal group;
(4) Multiplying the total production to count (see section 12(c)),
for each type or varietal group as applicable, by the respective price
election;
(5) Totaling the results in section 12(b)(4), if there are more
than one type or varietal group;
(6) Subtracting the total in section 12(b)(5) from the total in
section 12(b)(3); and
(7) Multiplying the result in section 12(b)(6) by your share. Basic
Coverage example:
You have 100 percent share and designated 10 acres of fresh apples
and 5 acres of processing apples in the unit on the acreage report,
with a 600 bushel per acre guarantee for both fresh and processing
apples and a price election of $9.10 per bushel for fresh apples and
$4.76 per bushel for processing apples that graded U.S. No. 1
Processing or better. You are only able to harvest 5,000 bushel of
fresh apples and 1,000 bushels of processing apples. Your indemnity
would be calculated as follows:
(1) 10 acres x 600 bushels = 6,000 bushels guarantee of fresh
apples; 5 acres x 600 bushels = 3,000 bushels guarantee of processing
apples;
(2) 6,000 bushels x $9.10 price election = $54,600.00 value of
guarantee for fresh apples; 3,000 bushels x $4.76 price election =
$14,280.00 value of guarantee for processing;
(3) $54,600.00 + $14,280.00 = $68,880.00 total value guarantee;
(4) 5,000 bushels x $9.10 price election = $45,500.00 value of
production to count for fresh apples; 1,000 bushels x $4.76 price
election = $4,760.00 value of production to count for processing;
(5) $45,500.00 + $4,760.00 = $50,260.00 total value of production
to count;
(6) $68,880.00 - $50,260.00 = $18,540.00 loss; and
(7) $18,540.00 x 100 percent share = $18,540.00 indemnity payment.
(c) The total apple production to count (in boxes or bushels) from
all insurable acreage on the unit will include:
(1) All appraised apple production as follows:
(i) Not less than the production guarantee per acre for acreage:
(A) That is abandoned;
(B) That is sold by direct marketing if you fail to meet the
requirements contained in section 11;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are
acceptable to us;
(ii) Apple production lost due to uninsured causes;
(iii) Unharvested apple production that would be marketable if
harvested; and
(iv) Potential marketable apple production on insured acreage that
you intend to abandon or no longer care for, if you and we agree on the
appraised amount of production. Upon such agreement, the insurance
period for that acreage will end. If you do not agree with our
appraisal, we may defer the claim only if you agree to continue to care
for the crop. We will then make another appraisal when you notify us of
further damage or that harvest is general in the area unless you
harvested the crop, in which case we will use the harvested production.
If you do not continue to care for the crop, our appraisal made prior
to deferring the claim will be used to determine the production to
count; and
(2) All harvested marketable apple production from the insurable
acreage.
(3) Unharvest and harvested mature fresh apple production to count
may be reduced in accordance with section 14 of these Crop Provisions
if you elect this option.
13. Late and Prevented Planting
The late and prevented planting provisions of the Basic Provisions
are not applicable.
[[Page 16186]]
14. Optional Coverage for Fresh Fruit Quality Adjustment.
(a) In the event of a conflict between the Apple Crop Insurance
Provisions and this option, this option will control.
(b) In return for payment of the additional premium designated in
the actuarial documents, this option provides for quality adjustment of
fresh apple production as follows:
(1) You must elect this option on or before the sales closing date
for the initial crop year for which you wish to insure your apples
under this option. This option will continue in effect until canceled
by either you or us for any succeeding crop year by written notice to
the other party on or before the cancellation date.
(2) To be eligible for this option, you must have elected to insure
your apples at the additional coverage level. If you elect Catastrophic
Risk Protection (CAT) after this option is effective, it will be
considered as notice of cancellation of this option by you.
(3) This option will apply to all your apple acreage designated in
your acreage report as grown for fresh apples and that meets the
insurability requirements specified in the Apple Crop Insurance
Provisions, except any acreage specifically excluded by the actuarial
documents. Any acreage designated in your acreage report as grown for
processing apples are not eligible for coverage under this option.
(4) In lieu of sections 12(c)(1)(iii) and (iv) and (2), the
production to count for appraised and harvested production for a unit
will include all fresh apple production in accordance with this option.
(5) If appraised or harvested fresh apple production is damaged by
an insured cause of loss to the extent that 80 percent or more of the
fresh apples do not grade U.S. Fancy or better, in accordance with
applicable USDA Standards for Grades of Apples, the following
adjustments will apply:
(i) Production to count with 21 through 40 percent of the fresh
apples not grading U.S. Fancy or better will be reduced 2 percent for
each full percent in excess of 20 percent.
(ii) Production to count with 41 through 50 percent of the fresh
apples not grading U.S. Fancy or better will be reduced 40 percent plus
an additional 3 percent for each full percent in excess of 40 percent.
(iii) Production to count with 51 percent through 64 percent of the
fresh apples not grading U.S. Fancy or better will be reduced 70
percent plus an additional 2 percent for each full percent in excess of
50 percent.
(iv) Production to count with 65 percent or more of the fresh
apples not grading U.S. Fancy or better will not be considered as
production to count.
The following is an example of loss under the Quality Option Fresh
Fruit Coverage: You have 100 percent share and designated 10 acres of
fresh apples and 5 acres of processing apples in the unit on the
acreage report, with a 600 bushels per acre guarantee for both fresh
and processing apples and a price election of $9.10 per bushel for
fresh apples and $4.76 per bushel for processing apples that graded
U.S. No. 1 Processing or better. You are only able to harvest 5,000
bushels of fresh apples, and of those only 2,750 bushels of apples
grade U.S. Fancy or better, and 1,000 bushels of processing apples.
Your indemnity would be calculated as follows:
(1) 10 acres x 600 bushels = 6,000 bushels guarantee of fresh
apples; 5 acres x 600 bushels = 3,000 bushels guarantee of processing
apples;
(2) 6,000 bushels x $9.10 price election = $54,600.00 value of
guarantee for fresh apples; 3,000 bushels x $4.76 price election =
$14,280.00 value of guarantee for processing;
(3) $54,600.00 + $14,280.00 = $68,880.00 total value guarantee;
(4) 5,000 bushels of fresh apples would be adjusted as follows:
2,750 / 5000 = 55 percent; 5,000 x .45 (40 percent reduction, plus an
additional 3 percent for each full percent in excess of 40 percent) =
2,250 bushels x $9.10 = $20,475.00 value of the fresh bushels; 1,000
bushels of processing apples x $4.76 price election = $4,760.00 value
of production to count.
(5) $20,475.00 + $4,760.00 = $25,235.00 total value of production
to count;
(6) $68,880.00 - $25,235.00 = $43,645.00 loss; and
(7) $43,645.00 x 100 percent share = $43,645.00 indemnity payment.
Signed in Washington, DC, on March 24, 2004.
Ross J. Davidson, Jr.,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 04-6938 Filed 3-26-04; 8:45 am]
BILLING CODE 3410-08-P