INFORMATIONAL MEMORANDUM: R&D-97-074 TO: All Reinsured Companies All Risk Management Field Offices FROM: Tim B. Witt /s/ Tim Hoffmann 10/10/97 Deputy Administrator SUBJECT: Table Grape Crop Insurance Provisions Attached is a copy of the Table Grape Crop Insurance Provisions that will be effective for the 1998 and succeeding crop years. The following is a brief description of the significant changes to these provisions. The provisions are also available on the Reporting Organization (RO) Server. Please refer to the provisions for more complete information. - Section 1 added definitions for the terms "adapted," "days," "direct marketing," "good farming practices," "graft," "interplanted," "irrigated practice," "non-contiguous," "production guarantee, per acre," "set out," and "written agreement" for clarification. Also changed the lug (box) weight in the Coachella Valley in California and in Arizona to 20 pounds, and to 21 pounds in all other California districts. A factor of 1.100 will be used to adjust the certified actual production history for 1996 and prior years to the new weight standards for lugs. - Section 2 changes the provisions to allow basic units by table grape variety. Also, each optional unit must now be located on non-contiguous land unless otherwise allowed by a written agreement. - Section 3(a) allows one price election and one coverage level for each variety in a county. - Section 3(b) specifies that the insured must report damage, removal of bearing vines, and any change in practices that may reduce yields. For the first year of insurance for acreage interplanted with another perennial crop and anytime the planting pattern of such acreage is changed, the insured must also report, the age and variety, if applicable, of any interplanted crop, its planting pattern, and any other information needed to establish the approved yield. If the insured fails to notify the insurance provider of factors that may reduce yields from previous levels, the insurance provider will reduce the production guarantee at any time they become aware of damage, removal of vines, or change in practices. - Section 6 specifies that the acreage of table grapes in the county must be reported by variety. - Section 7(a) specifies that the insured crop will be any insurable variety of table grapes in the county. Previous provisions required that all insurable table grape acreage in the county be insured. This change is commensurate with previous changes made in the regulations for insuring grapes in California. - Section 7(b) specifies that at least an average of 150 lugs of table grapes per acre must have been produced in at least 1 of the most recent 3 crop years of a producer's actual production history base period for the crop to be insured, unless the insurance provider inspects such acreage and gives their approval in writing to insure acreage that has not produced that amount. Previous crop provisions required 150 lugs per acre but did not state that the minimum must have been produced in 1 of the 3 most recent crop years. - Section 8 allows insurance for table grapes interplanted with another perennial crop to make insurance available on more acreage and reduce reliance on the noninsured crop disaster assistance program (NAP) for crop loss protection. - Section 9(a) specifies that for the year of application, if an application is received after January 22 but prior to February 1, insurance will attach on the 10th 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. Also the "end of insurance period dates" were removed from the policy since they are listed in the Special Provisions. This will allow the addition of dates for new varieties or revision of existing dates to be accomplished more quickly. - Section 9(b) adds provisions to clarify insurability when an insurable share is acquired or relinquished on or before the acreage reporting date. It also specifies that when coverage is transferred, the transferee must be eligible for crop insurance. - Section 10(b) clarifies that disease and insect infestation are excluded causes of loss unless adverse weather prevents the proper application of control measures, causes control measures to be ineffective when properly applied, or causes disease or insect infestation for which no effective control mechanism is available. Damage caused by phylloxera is not covered. - Section 11(b) adds provisions that require the insured to notify the insurance provider at least 15 days prior to any production being sold by direct marketing to permit a timely appraisal. Failure to give timely notice will result in an appraised amount of production to count of not less than the production guarantee per acre if such failure results in the insurance provider's inability to make the required appraisal. - Section 11(c) adds provisions that require an insured to notify the insurance provider of damage prior to harvest in order to permit a timely appraisal. Also adds provisions that prohibit the insured from destroying the crop until the earlier of 15 days from the date insured gives notice of loss or written consent is provided by the insurance provider. - Section 13 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. If you have any questions, please contact Dave Clauser of the Product Development Division at (816) 926-7730.