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Federal Register / Vol. 86, No. 239 / Thursday, December 16, 2021 / Proposed Rules 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 FCICs 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-infour 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 7f.
FCIC proposes to add a definition of high density. This term and its definition are added because of a proposed change in section 6.

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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 2FCIC 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 34b of the Basic Provisions. However, section 34c 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.
FCIC proposes to redesignate paragraphs a and b as paragraphs a1 and 2. FCIC proposes to revise redesignated paragraph a2. This section currently allows optional units by type as specified in the Special Provisions. Currently, every county where apples are insured includes a Special Provisions statement that allows optional units by type. The as specified in the Special Provisions provided the flexibility to permit optional units by type by county. Since optional units by type are permitted in every county, FCIC proposes to remove the phrase as specified in the Special Provisions and simply allow optional units by type through the Crop Provisions. FCIC also proposes to add the phrase unless otherwise provided in the Special Provisions to allow flexibility through Special Provisions to alter this language if it is determined optional units by type should not be allowed in certain counties.
FCIC also proposes to add a new paragraph b. Optional units by type are allowed in the Crop Provisions.
However, the Crop Provisions do not address situations where more than one type is planted on the same acreage. For example, Granny Smith apples are often
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planted with other types of apples on the same acreage. In section 3, FCIC
proposes to allow separate coverage levels and percentages of price elections by type. If optional units by type were not allowed in this situation, there would be a chance that AIPs would have to combine units resulting in different coverage levels and percentages of price elections within a single unit. To address this, FCIC
proposes to add language that states the requirements of section 34 of the Basic Provisions that require the crop to be planted in a manner that results in a clear and discernable break in the planting pattern at the boundaries of each optional unit are not applicable for optional units by type. This will allow separate optional units for types that do not have a clear and discernable planting pattern, such as situations where more than one type is planted on the same acreage. However, it is important that producers maintain separate records of production for each optional unit in accordance with section 12a of the Apple Crop Provisions.
4. Section 3FCIC proposes to revise paragraph a to allow separate coverage levels by type. The current provisions allow producers who purchase additional coverage to only select separate coverage levels by fresh apple acreage and processing apple acreage.
Fresh and processing are separate types;
however, in addition to the general Fresh Combined type, there are three other fresh types listed in the actuarial documents that are classified as fresh: Varietal group A, varietal group B, and varietal group C. Under the current provisions, producers who insure apples under any of the fresh type must select the same coverage level for all of their fresh types. The proposed changes will provide producers the ability to select a separate coverage level for each fresh type and will allow producers, who purchase additional coverage, to structure their coverage based on the perceived risk associated with each fresh type. For example, the producer could select 90 percent coverage level for varietal group A and 70 percent coverage level for varietal group B.
FCIC proposes to revise paragraph b to replace the Special Provisions reference in two places with a reference to the actuarial documents because the provisions refer to the location of price elections. Actuarial documents are where the price elections are located, so actuarial documents are a more appropriate reference. FCIC also proposes to revise paragraph b to allow the price election percentage to differ among each type. The types may have
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