INFORMATIONAL MEMORANDUM: R&D-96-075 TO: All Reinsured Companies All Risk Management Field Offices FSA Headquarters, Program Delivery and Field Operations FROM: Tim B. Witt /s/ Tim B. Witt 12/2/96 Acting Deputy Administrator Research and Development SUBJECT: Pear Crop Insurance Provisions Attached are the Pear Crop Provisions, effective for the 1998 and succeeding crop years. The following is a brief description of the significant changes to these provisions. Please refer to the provisions for more complete information. - Section 2 allows basic units to be divided into optional units by section, section equivalent or FSA Farm Serial Number; or by non- contiguous land, but not by both. Optional units may also be established by varietal group when provided for in the Special Provisions. The previous endorsement allowed units to be established by: type I or type II; and when the acreage of the insured pears was located on non-contiguous land. All references to type I and type II have been deleted from the policy. - Section 3(b) specifies that the producer must report by the production reporting date 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. For the first year of insurance for acreage interplanted with another perennial crop, and anytime the planting pattern of such acreage is changed the producer must also report the age of the interplanted crop, type if applicable, planting pattern, and any other information that the insurance provider requests in order to establish the approved yield. - Section 4 changes the contract change date in California from August 31 to October 31 to be consistent with other perennial crops in California. - Section 5 changes the cancellation and termination dates in California from November 20 to January 31 to be consistent with other perennial crops in California. - Section 6(c) specifies that to be insurable the pears must be grown on trees that have produced an average of at least 5 tons per acre, in at least 1 of the 4 previous crop years unless the Special Provisions or a written agreement set a lower threshold. - Section 7 makes pears interplanted with another perennial crop insurable unless the insurance provider inspects the acreage and determines it does not meet the requirements contained in the producer's policy. - Section 8(a)(1)(i) specifies that in California insurance coverage begins on February 1 of each crop year, except that for the year of application if the producer's application is received after January 22 but prior to February 1, insurance will attach on the tenth day after the properly completed application is received in the insurance provider's local office, unless the insurance provider inspects the acreage during the 10-day period and determines that it does not meet insurability requirements. Under the current policy, insurance attaches on November 21. - Section 8(a)(1)(ii) specifies that in all other states, except California, insurance coverage begins on November 21 of each crop year, except that for the year of application if the producers application is received after November 11 but prior to November 21, insurance will attach on the tenth day after the properly completed application is received in the insurance provider's local office, unless the insurance provider inspects the acreage during the 10-day period and determines that it does not meet insurability requirements. Under the current policy, insurance attaches on November 21. - Section 8(b)(1) specifies that if the producer acquires 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 the insurance provider considers the acreage acceptable, insurance will be considered to have attached to such acreage on the calendar date for the beginning of the insurance period. - Section 8(b)(2) specifies that if the producer relinquishes an insurable interest on any insurable acreage of pears on or before the acreage reporting date of any crop year, insurance will not be considered to have attached to, and no premium will be due, and no indemnity paid, for such acreage for that crop year unless: a transfer form is completed by all affected parties; the insurance provider is notified in writing of such transfer on or before the acreage reporting date; and the transferee is eligible for crop insurance. - Section 9(a)(1) added adverse weather conditions as a cause of loss and deleted drought, excess wind, flood, freeze, frost, fruit-set failure and hail. - Section 9(a)(5) specifies that failure of the irrigation water supply must be caused by an insured peril that occurs during the insurance period. - Section 9(b)(1) specifies that damage or loss of production due to disease or insect infestation, will not be insurable unless adverse weather prevents: the proper application of control measures; causes properly applied control measures to be ineffective; or causes disease or insect infestation for which no effective control mechanism is available. - Section 10 specifies that the producer must notify the insurance provider: within 3 days of the date harvest should have started if the crop will not be harvested; at least 15 days before any production from any unit will be sold by direct marketing; and at least 15 days prior to the beginning of harvest if the producer previously gave notice in accordance with section 14 of the Basic Provisions. - Section 11 deletes provisions for quality adjustment of pears in all States, except California. - Section 12 adds provisions for providing insurance coverage by written agreement. - Section 13 provides for a quality adjustment endorsement for all States, except California, if the actuarial table designates a premium rate and if the insured meets the following: has not elected to insure pears under the Catastrophic Risk Protection Endorsement; elected the Pear Quality Adjustment Endorsement on the application on or before the sales closing date for the initial crop year for which the producer wanted it to be effective; and the policy was not canceled on or before the cancellation date. Under this endorsement if the pear production is damaged by hail and if 11 percent or more of the harvested and appraised production does not grade at least U.S. No. 2 in accordance with applicable United States standards due solely to hail, the amount of production to count will be reduced as follows: by 2 percent for each full 1 percent in excess of 10 percent when 11 percent through 60 percent of the pears fail the grade standard; or by 100 percent when more than 60 percent of the pears fail the grade standard. The difference between the reduced production and the total production will be considered as cull production. Pears that are knocked to the ground by wind or that are frozen and cannot be packed or marketed as fresh pears will be considered 100 percent cull production. Fifteen percent of all production considered as cull production will be production to count. Attachment - NOTE: ENTIRE BULLETIN WITH ATTACHMENT WILL BE MAILED