INFORMATIONAL MEMORANDUM: R&D-97-026 TO: All Reinsured Companies All Risk Management Field Offices FSA Headquarters, Program Delivery and Field Operations FROM: Tim B. Witt /S/ TIM B. WITT 04/01/97 Deputy Administrator SUBJECT: Fresh Market Sweet Corn Crop Insurance Provisions Attached is a copy of the Fresh Market Sweet Corn Crop Insurance Provisions effective for the 1998 and succeeding crop years. A brief description of the significant changes to these provisions follows. Please refer to the provisions for complete information. - Section 1 adds the definition of container to specify that a container is the unit of measure of the insured crop as specified in the Special Provisions. Harvested and unharvested production was determined in previous regulations by the number of 42-pound crates. This change will allow expansion into areas utilizing other units of measure for production. - Section 1 clarifies the definition of crop year by stating that the crop year begins on the first day of the earliest planting period for fall-planted sweet corn and continues through the end of the insurance period for spring-planted sweet corn. - Section 1 clarifies the definition of excess wind to specify that excess wind is wind speeds strong enough to prevent adequate pollination or cause lodging of stalks and prevent a normal harvest. Previous regulations provided coverage of excess wind which occurred in conjunction with a cyclone. - Section 1 changes the definition of freeze to specify that freeze occurs when low air temperatures cause ice to form in the cells of the plant or its fruit to encompass conditions found in both frost and freeze. - Section 1 changes the definition of harvest to clarify and remove the term marketable. Sweet corn picked from the stalk is considered harvested whether marketable or not. - Section 3(a) clarifies that an insured may select only one coverage level (and the corresponding amount of insurance designated in the Actuarial Table for the applicable planting period and practice) for all the sweet corn in the county insured under the policy. - Section 3(b) clarifies that the amounts of insurance the insured chooses for each planting period and practice must have the same percentage relationship to the maximum amount of insurance offered by FCIC for each planting period and practice. - Section 5 changes the cancellation and termination dates to March 15 for all States that currently have an April 15 date. This change is necessary to standardize the cancellation and termination dates with the sales closing dates that were changed for spring planted crops to comply with the requirements of the Federal Crop Insurance Reform Act of 1994. To allow sweet corn crop expansion into other areas, Berrien County, Georgia, has been added to the Georgia counties that have July 31 cancellation and termination dates. The July 31 cancellation and termination dates for Berrien County, Georgia, coincide with production practices of other Georgia counties with that same date. - Section 8(b)(3) clarifies that the insured crop will be grown under an irrigated practice, unless otherwise provided in the Special Provisions. This change will allow expansion in other areas as appropriate. - Section 9(a) adds a provision that will provide coverage on newly cleared land or former pasture land that is planted to fresh market sweet corn. It is a recognized practice to plant the insured crop on tilled acreage that has been newly cleared or has been pasture land to eliminate some of the risk of disease and insect damage. This change also will standardize current regulations for the fresh market vegetable crops. - Section 9(b)(2) allows an insured to elect not to replant damaged sweet corn that is initially planted within the fall or winter planting periods, provided the final planting date for the planting period has passed. With this election, the insured may collect an indemnity and that particular acreage will be uninsurable for the next planting period. The insured may also elect to replant such sweet corn acreage, collect a replanting payment under section 12, and maintain the initial planting period coverage. This change incorporates and standardizes procedures utilized in the fresh market vegetable crops. - Section 10(f) adds the calendar date for the end of the insurance period in the sweet corn crop provisions and has been established as 100 days after the date of planting or replanting. This change incorporates the actual number of days for sweet corn to reach maturity and for the crop to be harvested. This change will also standardize provisions to that of other crop insurance policies. Currently, the calendar date for the end of the insurance period is contained in the Actuarial Table. - Section 11(a) adds excess rain and excess wind as insurable causes of loss. Current regulations allow these causes to be covered only if they occur in conjunction with a cyclone. Removal of the requirement that these causes of loss must occur in conjunction with a cyclone will provide coverages for crop damage that is not associated with a cyclone. - Section 11(b)(1) specifies that disease and insect infestation are not an insured cause of loss, unless no effective control measure exists for such disease or insect infestation. - Section 12(b) specifies the maximum amount of the replanting payment per acre will be the lesser of the actual cost of replanting, or the result obtained by multiplying the per acre replanting payment amount contained in the Special Provisions by the insured share. This change will allow the flexibility to set the amount at appropriate levels. - Section 13 changes notice of damage or loss requirements to require that if the insured intends to claim an indemnity on any unit, notice must be given within 72 hours after the earliest of: discontinuance of harvest of any acreage on the unit; the date harvest would normally start if any acreage on the unit will not be harvested; or the calendar date for the end of the insurance period. This change will standardize provisions found in all fresh market vegetable crop policies. - Section 14(b)(2) modifies the claim for indemnity calculations by providing calculations for catastrophic risk protection coverage and for coverage other than catastrophic risk protection. This provision includes the use of the catastrophic risk protection price election equivalent to determine the total dollar of production to count for indemnity purposes. This change is necessary to assure that producers that are insured based on a dollar amount of insurance are indemnified comparable to producers that are insured based on an actual production history (APH) yield basis. - Section 14(c)(1) clarifies that the insured will receive not less than the amount of insurance per acre for the applicable stage for acreage that is: abandoned; put to another use without the insurance provider's consent; damaged solely by uninsured causes, or for which the insured fails to provide production records. Current regulations require that not less than the final stage dollar amount of insurance be assessed for such acreage. This change allows for either the first stage amount of insurance or the final stage amount of insurance to be assessed against such acreage, depending on the growth stage of the crop when the event occurred. This change will standardize the provisions found in all fresh market vegetable crops. - Section 14(c)(2)(iii) requires the insured to continue to care for acreage when the insured does not agree with the appraisal on that acreage. Production to count for such acreage will be determined using the harvested production if the crop is harvested, or our reappraisal if the crop is not harvested. - Section 14(c)(3) changes the value to count for harvested production to the dollar amount obtained by subtracting the allowable cost from the price received (this resulting price must not be less than the minimum value shown in the Special Provisions), and multiplying this result by the number of containers harvested. Current regulations allow the value of sold production to be as low as zero. Also, clarifies that harvested mature sweet corn that is damaged or defective due to insurable causes and is not marketable will not be counted as production. These changes are made to assure that the minimum value specified in the Special Provisions will be the lowest value considered for any marketable harvested production unless the insured selected the minimum value option. - Section 15 adds provisions for providing insurance coverage by written agreement. FCIC has a long standing policy of permitting certain modifications of the insurance contract by written agreement for some policies. This amendment allows FCIC to tailor the policy to a specific insured in certain instances. The new section will cover the procedures for and duration of written agreements. - Section 16 adds a minimum value option. The option allows the value of each harvested container to be as low as zero. This option is selected on the insurance application. This change will provide consistency in regulations found in other fresh market vegetable crops. If you have any questions, please contact David Clauser of the Product Development Division at (816) 926-7730. Attachment - BULLETIN AND ATTACHMENT WILL BE MAILED