Federal Register Extracts

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

SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to amend the Common Crop Insurance Regulations, Apple Crop Insurance Provisions. The intended effect of this action is to provide policy changes to better meet the needs of the apple producers, to address program vulnerabilities that have caused increased loss ratios and rising premium costs, and to provide safeguards against fraud, waste, and abuse. The proposed changes will be effective for the 2023 and succeeding crop years.

DATES: Written comments and opinions on this proposed rule will be accepted until close of business February 14, 2022 and will be considered when the rule is to be made final.

ADDRESSES: We invite you to submit comments on this rule. You may submit comments by either of the following methods, although FCIC prefers that you submit comments electronically through the Federal eRulemaking Portal:

* Federal eRulemaking Portal: Go to https://www.regulations.gov and search for Docket ID FCIC-21-0007. Follow the instructions for submitting comments.

* Mail: Director, Product Administration and Standards Division, Risk Management Agency (RMA), U.S. Department of Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205. In your comment, specify docket ID FCIC-21-0007.

* Comments will be available for viewing online at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Francie Tolle; telephone (816) 926-7829; or email francie.tolle@usda.gov. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION:

Background The FCIC serves America's agricultural producers through effective, market-based risk management tools to strengthen the economic stability of agricultural producers and rural communities. FCIC is committed to increasing the availability and effectiveness of Federal crop insurance as a risk management tool. Approved Insurance Providers (AIP) sell and service Federal crop insurance policies in every state through a public-private partnership. FCIC reinsures the AIPs who share the risks associated with catastrophic losses due to major weather events. FCIC's vision is to secure the future of agriculture by providing world class risk management tools to rural America.

FCIC proposes to amend the Common Crop Insurance Regulations by revising 7 CFR 457.158 Apple Crop Insurance Provisions to be effective for the 2023 and succeeding crop years.

The proposed changes to 7 CFR 457.158 Apple Crop Insurance Provisions are as follows:

1. Throughout the Crop Provisions, FCIC proposes to include a reference to a type listed in the actuarial documents. The type name proposed is "Fresh (Combined)," which is synonymous with type "Fresh 111" that policyholders are likely familiar with. FCIC proposes no changes to what is insurable under the type; the only proposed change is to the type name.

2. Section 1--FCIC proposes to add a definition of "Apple Supplemental Report." This term and its definition are added because of proposed changes in section 3 and section 6.

FCIC proposes to add a definition of "block." This term is used in the Crop Provisions but had not been defined.

FCIC proposes to revise the definition of "damaged apple production." The current definition defines damaged apple production in two parts: (1) With respect to production insured under the base policy, damaged apple production is fresh or processing apple production that fails to grade U.S. No. 1 Processing or better; and (2) with respect to production insured under the Fresh Fruit Quality Adjustment (Quality Option), damaged apple production is fresh apple production that fails to grade U.S. Fancy or better. FCIC is proposing changes in the Quality Option that require production that grades U.S. #1 Processing or better but less than U.S. Fancy to be included in production to count at a reduced value; therefore, the proposed revisions to the definition of "damaged apple production" had to be the same for apples insured under the base policy and apples insured under the Quality Option. Due to these proposed changes, the second part of the definition of "damaged apple production," which refers to the Quality Option, is proposed to be removed.

FCIC proposes to revise the definition of "direct marketing." Direct marketing is the 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. The definition is being revised to provide two clarifications. The first is to state that production records are controlled exclusively by the policyholder. The second is to add a sentence clarifying that only the portion of the crop sold directly to consumers will be considered direct marketed.

FCIC proposes to revise the definition of "fresh apple production." FCIC proposes to move paragraphs (1)(ii), (1)(iv) and (2) to Section 7, Insured Crop, because these paragraphs contain provisions that are more appropriately placed in that section. FCIC proposes to redesignate paragraph (1)(i) as (1), paragraph (1)(iii) as (3), revise redesignated paragraphs (1) and (3), and add a new paragraph (2). In redesignated paragraph (1), the definition contains a list of actions that the apples undergo to change them from their basic form. Even though "dicing" was not included in the list of actions, one could maintain that it was included in the catch-all "etc." at the end of the list. However, FCIC received questions regarding whether "dicing" would be considered in this list of actions. To provide clarification, FCIC proposes to add the word "dicing" to the list of actions that would constitute changing apples from their basic form.

In new paragraph (2), FCIC proposes to clarify that apples sold for the processing market are not considered fresh apple production unless they were sold with a grade of U.S. Fancy or better. For example, apples sold for the slicer market or the hard cider market that are not sold with a grade of U.S. Fancy or better. According to the definition, as here pertinent, "fresh apple production" is apples that do not undergo any change in basic form. Slicer apples are, just as their name suggests, apples that are sliced, which is a change in basic form. Sales of slicer apples are currently allowed to be considered fresh if the sales price was commensurate with fresh apple sales. However, slicers are a processed apple, meaning they undergo a change in basic form. Similarly, apples sold to the hard cider market undergo a change in basic form. A contracted study completed at FCIC's request determined that prices for slicers are more commensurate with processing apples. Currently, apples sold as slicers can be insured as Fresh, thus qualifying for optional coverage under the Quality Option; however, they can be sold without a grade of U.S. Fancy, thus never being included in production to count, and contributing to high loss ratios in some areas. Under this proposed change, records indicating apples were sold as slicers or for hard cider will not be used to determine whether production meets the one-in-four fresh requirement under the Quality Option unless the apples were sold with a grade of U.S. Fancy or better.

FCIC also proposes to revise redesignated paragraph (3). The current provisions require producers to follow cultural practices generally in use for fresh apple acreage in the area in a manner generally recognized by agricultural experts. FCIC proposes to revise this paragraph to provide flexibility through Special Provisions to include additional cultural practices that may be required for acreage to meet the definition of "fresh apple production." Examples of cultural practices may include specific spraying programs, hail netting, and wind machines or misting systems.

FCIC proposes to add a definition of "fresh fruit factor." This term and its definition are added because of proposed changes made in section 14.

FCIC proposes to add a definition of "graft." This term and its definition are added because of proposed changes made in section 7(f).

FCIC proposes to add a definition of "high density." This term and its definition are added because of a proposed change in section 6.

FCIC proposes to add definitions of "maximum additional value price" and "premium price election" because of proposed changes made in section 3.

FCIC proposes to revise the definition of "processing apple production." FCIC proposes to add the word "dicing" to the list of actions that would constitute changing apples from their basic form, to be consistent with the addition in the definition of "fresh apple production." FCIC also proposes to remove the phrase "failing to meet the insurability requirements for fresh apple production" and add similar language to it in Section 7, Insured Crop, because this language contains provisions that are more appropriately placed in that section.

3. Section 2--FCIC proposes to designate the undesignated paragraph as paragraph (a) and revise the lead-in sentence in that paragraph to make two proposed changes. First, current provisions reference section 34(b) of the Basic Provisions. However, section 34(c) of the Basic Provisions is a more appropriate reference. Second, the current provisions are not clear whether producers can have optional units in addition to or instead of the optional unit offerings under the Basic Provisions. FCIC proposes to clarify that optional units by non-contiguous land or type may be established in addition to or instead of the optional unit provisions in the Basic Provisions.

--This is a summary of a Federal Register article originally published on the page number listed below--

Proposed rule.

CFR Part: "7 CFR Part 457"

RIN Number: "RIN 0563-AC75"

Citation: "86 FR 71396"

Document Number: "Docket ID FCIC-21-0007"

Federal Register Page Number: "71396"

"Proposed Rules"