7 CFR § 457.154 - Processing sweet corn crop insurance provisions.
The Processing Sweet Corn Crop Insurance Provisions for the 2023 and succeeding crop years are as follows:
Base contract price. The price stipulated on the processor contract without regard to discounts or incentives that may apply.
Bypassed acreage. Land on which production is ready for harvest but the processor elects not to accept such production so it is not harvested.
Good farming practices. In addition to the definition contained in the Basic Provisions, cultural practices required by the processor contract.
Harvest. The removal of the ears from the stalks for the purpose of delivery to the processor.
Planted acreage. In addition to the definition contained in the Basic Provisions, sweet corn must initially be placed in rows far enough apart to permit mechanical cultivation. Acreage planted in any other manner will not be insurable unless otherwise provided by the Special Provisions or by written agreement.
Practical to replant. In addition to the definition in the Basic Provisions, it will not be considered practical to replant unless the replanted acreage can produce at least 75 percent of the approved yield, and the processor agrees in writing that it will accept the production from the replanted acreage.
Price election. In lieu of the definition of price election in the Basic Provisions, the price election will be the base contract price stated in your processor contract.
Processor. Any business enterprise regularly engaged in canning or freezing processing sweet corn for human consumption, that possesses all licenses and permits for processing sweet corn required by the state in which it operates, and that possesses facilities, or has contractual access to such facilities, with enough equipment to accept and process contracted processing sweet corn within a reasonable amount of time after harvest.
Processor contract.
(1) A written contract between the producer and a processor, containing at a minimum:
(i) The producer's commitment to plant and grow sweet corn, and to deliver the sweet corn production to the processor;
(ii) The processor's commitment to purchase all the production stated in the processor contract; and
(iii) A base contract price.
(2) Multiple contracts with the same processor that specify amounts of production will be considered as a single processor contract, unless the contracts are for different types. Your base contract price will be the weighted average of all applicable base contract prices.
Ton. Two thousand (2,000) pounds avoirdupois.
Unhusked ear weight. Weight of the seed-bearing spike of sweet corn including the membranous or green outer envelope.
Usable tons. The quantity of sweet corn for which the producer is compensated or should have been compensated by the processor.
(a) For processor contracts that stipulate the amount of production to be delivered:
(1) In lieu of the definition contained in the Basic Provisions, a basic unit will consist of all acreage planted to the insured crop in the county that will be used to fulfill contracts with each processor;
(i) There will be no more than one basic unit for all production contracted with each processor contract;
(ii) In accordance with section 12, all production from any basic unit in excess of the amount under contract will be included as production to count if such production is applied to any other basic unit for which the contracted amount has not been fulfilled; and
(2) Provisions in the Basic Provisions that allow optional units by section, section equivalent, or FSA farm number and by irrigated and non-irrigated practices are not applicable.
(b) For any processor contract that stipulates the number of acres to be planted, the provisions contained in section 34 of the Basic Provisions will apply.
In addition to section 3 of the Basic Provisions:
(a) You may select only one price election percentage for all the processing sweet corn in the county insured under this policy. The percentage of the maximum price election you choose for one type will be applicable to all other types insured under this policy.
(b) The insurance guarantee per acre is expressed as tons of unhusked ear weight. Any other measured production will be converted to an unhusked ear weight equivalent.
(c) The appraised production from bypassed acreage that could have been accepted by the processor will be included when determining your approved yield.
(d) Acreage that is bypassed because it was damaged by an insurable cause of loss will be considered to have a zero yield when determining your approved yield.
In accordance with section 4 of the Basic Provisions, the contract change date is November 30 preceding the cancellation date.
In accordance with section 2 of the Basic Provisions, the cancellation and termination dates are March 15.
In addition to section 6 of the Basic Provisions, you must provide a copy of all processor contracts to us on or before the acreage reporting date.
(a) In accordance with section 8 of the Basic Provisions, the crop insured will be all the processing sweet corn in the county for which a premium rate is provided by the actuarial documents:
(1) In which you have a share;
(2) That is grown under, and in accordance with, the requirements of a processor contract executed on or before the acreage reporting date and not excluded from the processor contract at any time during the crop year; and
(3) That is not (unless allowed by the Special Provisions or by written agreement):
(i) Interplanted with another crop; or
(ii) Planted into an established grass or legume.
(b) You will be considered to have a share in the insured crop if, under the processor contract, you retain control of the acreage on which the sweet corn is grown, you are at risk of loss, and the processor contract provides for delivery of sweet corn under specified conditions and at a stipulated base contract price.
(c) A commercial sweet corn producer who is also a processor may establish an insurable interest if the following requirements are met:
(1) The producer must comply with these Crop Provisions;
(2) Prior to the sales closing date, the Board of Directors or officers of the processor must execute and adopt a resolution that contains the same terms as an acceptable processor contract. Such resolution will be considered a processor contract under this policy; and
(3) Our inspection reveals that the processing facilities comply with the definition of a processor contained in these Crop Provisions.
In addition to section 9 of the Basic Provisions:
(a) Any acreage of the insured crop that is damaged before the final planting date, to the extent that the majority of producers in the area would normally not further care for the crop, must be replanted unless we agree that it is not practical to replant; and
(b) We will not insure any acreage that does not meet the rotation requirements, if applicable, contained in the Special Provisions.
In lieu of section 11 of the Basic Provisions, regarding the end of the insurance period, insurance ceases at the earlier of:
(a) The date the sweet corn:
(1) Was destroyed;
(2) Should have been harvested but was not harvested;
(3) Was abandoned; or
(4) Was harvested;
(b) The date you harvest sufficient production to fulfill your processor contract if the processor contract stipulates a specific amount of production to be delivered;
(c) Final adjustment of a loss; or
(d) The end of insurance date specified in the Special Provisions or otherwise allowed by written agreement.
In accordance with section 12 of the Basic Provisions:
(a) Insurance is provided only against the following causes of loss that occur during the insurance period:
(1) Adverse weather conditions, including:
(i) Excessive moisture that prevents harvesting equipment from entering the field or that prevents the timely operation of harvesting equipment; and
(ii) Abnormally hot or cold temperatures that cause an unexpected number of acres over a large producing area to be ready for harvest at the same time, affecting the timely harvest of a large number of such acres or the processing of such production is beyond the capacity of the processor, either of which causes the acreage to be bypassed.
(2) Fire;
(3) Insects, but not damage due to insufficient or improper application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper application of disease control measures or as otherwise limited by the Special Provisions;
(5) Wildlife;
(6) Earthquake;
(7) Volcanic eruption; or
(8) Failure of the irrigation water supply, if due to a cause of loss listed in section 10(a)(1) through (7) that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 of the Basic Provisions, we will not insure any loss of production due to:
(1) Bypassed acreage because of:
(i) The breakdown or non-operation of equipment or facilities; or
(ii) The availability of a crop insurance payment. We may deny any indemnity immediately in such circumstance or, if an indemnity has been paid, require you to repay it to us with interest at any time acreage was bypassed due to the availability of a crop insurance payment; or
(2) Your failure to follow the requirements contained in the processor contract.
In addition to section 14 of the Basic Provisions, you must give us notice:
(a) Not later than 48 hours after:
(1) Total destruction of the sweet corn on the unit; or
(2) Discontinuance of harvest on a unit on which unharvested production remains.
(b) Within 3 days after the date harvest should have started on any acreage that will not be harvested unless we have previously released the acreage. You must also provide acceptable documentation of the reason the acreage was bypassed. Failure to provide such documentation will result in our determination that the acreage was bypassed due to an uninsured cause of loss. If the crop will not be harvested and you wish to destroy the crop, you must leave representative samples of the unharvested crop for our inspection. The samples must be at least 10 feet wide and extend the entire length of each field in each unit. The samples must not be destroyed until the earlier of our inspection or 15 days after notice is given to us; and
(c) At least 15 days prior to the beginning of harvest if you intend to claim an indemnity on any unit, or immediately if damage is discovered during the 15 day period or during harvest, so that we may inspect any damaged production. If you fail to notify us and such failure results in our inability to inspect the damaged production, we will consider all such production to be undamaged and include it as production to count. You are not required to delay harvest.
(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 units, we will combine all optional units for which such production records were not provided; or
(2) For any basic units, 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 by:
(1) Multiplying the insured acreage by its respective production guarantee, by type if applicable;
(2) Multiplying each result of section 12(b)(1) by the respective price election, by type if applicable;
(3) Totaling the results of section 12(b)(2) if there are more than one type;
(4) Multiplying the total production to count (see section 12(c)), for each type if applicable, by its respective price election;
(5) Totaling the results of section 12(b)(4) if there are more than one type;
(6) Subtracting the results of section 12(b)(4) from the results of section 12(b)(2) if there is only one type or subtracting the results of section 12(b)(5) from the result of section 12(b)(3) if there are more than one type; and
(7) Multiplying the result of section 12(b)(6) by your share.
For example:
You have a 100 percent share in 100 acres of type A processing sweet corn in the unit, with a guarantee of 6.0 tons per acre and a price election of $100.00 per ton. You are only able to harvest 200 tons. Your indemnity would be calculated as follows:
(1) 100 acres × 6.0 tons = 600 tons guarantee;
(2) 600 tons × $100.00 price election = $60,000.00 value of guarantee;
(3) Not applicable;
(4) 200 tons × $100.00 price election = $20,000.00 value of production to count;
(5) Not applicable;
(6) $60,000.00−$20,000.00 = $40,000.00 loss; and
(7) $40,000.00 × 100 percent = $40,000.00 indemnity payment.
You also have a 100 percent share in 100 acres of type B processing sweet corn in the same unit, with a guarantee of 60 tons per acre and a price election of $90.00 per ton. You are only able to harvest 350 tons. Your total indemnity for both types A and B would be calculated as follows:
(1) 100 acres × 6.0 tons = 600 tons guarantee for type A, and 100 acres × 6.0 tons = 600 tons guarantee for type B;
(2) 600 tons × $100.00 price election = $60,000.00 value of guarantee for type A, and 600 tons × $90.00 price election = $54,000.00 value of guarantee for type B;
(3) $60,000.00 + $54,000.00 = $114,000.00 total value of guarantee;
(4) 200 tons × $100.00 price election = $20,000.00 value of production to count for type A, and 350 tons × $90.00 price election = $31,500.00 value of production to count for type B;
(5) $20,000.00 + $31,500.00 = $51,500.00 total value of production to count;
(6) $114,000.00−$51,500.00 = $62,500.00 loss; and
(7) $62,500.00 loss × 100 percent = $62,500.00 indemnity payment.
(c) The total production to count, specified in tons of unhusked ear weight, from all insurable acreage on the unit will include:
(1) All appraised production as follows:
(i) Not less than the production guarantee for acreage:
(A) That is abandoned;
(B) That is put to another use without our consent;
(C) That is damaged solely by uninsured causes; or
(D) For which you fail to provide production records that are acceptable to us.
(ii) Production lost due to uninsured causes.
(iii) Production on acreage that is bypassed unless the acreage was bypassed due to an insured cause of loss which resulted in production which would not be acceptable under the terms of the processor contract.
(iv) Potential production on insured acreage that you intend to put to another use or abandon, if you and we agree on the appraised amount of production. Upon such agreement, the insurance period for that acreage will end when you put the acreage to another use or abandon the crop. If agreement on the appraised amount of production is not reached:
(A) If you do not elect to continue to care for the crop, we may give you consent to put the acreage to another use if you agree to leave intact, and provide sufficient care for, representative samples of the crop in locations acceptable to us (The amount of production to count for such acreage will be based on the harvested production or appraisals from the samples at the time harvest should have occurred. If you do not leave the required samples intact, or fail to provide sufficient care for the samples, our appraisal made prior to giving you consent to put the acreage to another use will be used to determine the amount of production to count); or
(B) If you elect to continue to care for the crop, the amount of production to count for the acreage will be the harvested production, or our reappraisal if additional damage occurs and the crop is not harvested.
(2) All harvested processing sweet corn production from the insurable acreage. The amount of such production will be:
(i) The usable tons of processing sweet corn shown on the processor settlement sheet, if available; or
(ii) Determined by dividing the dollar amount paid, payable, or which should have been paid under the terms of the processor contract for the quantity of the sweet corn delivered to the processor by the base contract price per ton; and
(3) All harvested processing sweet corn production from any other insurable units that have been used to fulfill your processor contract for this unit.
The total production to count will be expressed as an unhusked ear weight. Any other measure of production will be converted to an unhusked ear weight equivalent.
A late planting period is not applicable to processing sweet corn unless allowed by the Special Provisions and you provide written approval from the processor by the acreage reporting date that it will accept the production from the late planted acres when it is expected to be ready for harvest.
Your prevented planting coverage will be a percentage specified in the actuarial documents of your production guarantee for timely planted acreage. If you have additional levels of coverage and pay an additional premium, you may increase your prevented planting coverage if such additional coverage is specified in the actuarial documents.