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John Shea (202) 690-0437

A MESSAGE FROM RMA ADMINISTRATOR ELDON GOULD

WASHINGTON, Dec 23, 2005 - The Risk Management Agency is celebrating the 25th anniversary of the Federal Crop Insurance Act, which became law in 1980, creating the unique partnership between private insurance companies and the Federal government within the Federal crop insurance program. Presently, 16 companies serve as approved insurance providers and together, we have provided over $44 billion in coverage for America's farms and ranches in 2005. We are proud of the improvements and growth of the past quarter century and look forward to continuing that progress.

As we begin 2006, the Federal Crop Insurance Corporation (Board) has a full plate. In the first meeting of the year, the Board, made up of agriculture and insurance industry experts and chaired by Dr. Keith Collins, the Chief Economist for the U.S. Department of Agriculture, will consider action on a number of items. One product for consideration will be the pasture rangeland forage-rainfall index. It is a group risk policy, utilizing a weather database maintained by the National Oceanic and Atmospheric Administration (NOAA). The issue of a useful insurance program for pasture, rangeland and forage is a high priority for the agency.

Significant changes to the nursery crop insurance provisions for the 2006 crop year were made available in June 2005. Some changes were made in response to difficult hurricanes seasons in recent years. The changes which the grower needs to be most aware of involve the automatic coverage feature and the coverage level change date. For the 2006 year only, there are 30-day waiting periods related to changing the policy, please check with your insurance agent or company or read the bulletin: www.rma.usda.gov/news/r-and-d/2005/PDF/rd05-036.pdf.

RMA and the USDA Office of General Counsel have reviewed the proposed rule that creates a combination insurance product which combines the Actual Production History (APH), Crop Revenue Coverage (CRC), Income Protection (IP), Indexed Income Protection (IIP), and Revenue Assurance (RA) plans into one plan of insurance. The rule now must be approved at the USDA level, then published for comment. If approved, the pilot program, called the Combo Product, would affect wheat, barley, cotton, corn, grain sorghum, soybeans, rice, and canola/rapeseed crops.

Requirements for written agreements have changed as well. In the past, if conventional crop insurance was not available for a specific crop in a county, a written agreement could be offered provided the producer could show a three-year production history for that crop in that county. The new language provides that a similar crop may be used to fulfill the three-year history requirement.

In 2006, as in years past, RMA will award millions of dollars in agricultural risk management partnership agreements. The agreements provide funds for projects to develop new risk management tools for farmers and ranchers, as well as outreach and education opportunities to limited-resource and other traditionally underserved farmers and ranchers.

In the new year, we at the Risk Management Agency will continue our commitment to deliver improved risk management solutions for the American farmer.