BULLETIN NO.: MGR-96-053

TO:       All Reinsured Companies
          All Risk Management Field Offices
          FSA Headquarters, Program Delivery and Field Offices

FROM:     Kenneth D. Ackerman                
          Acting Administrator

SUBJECT:  Flue-Cured Tobacco For Automatic Harvesting By Machine Agreement

Issue:         

We have received questions whether the additional premium charged for 
Flue-Cured Tobacco for Automatic Harvesting by Machine Agreements (Tobacco 
Agreement) is valid for the 1996 crop year. 

Discussion:

The Risk Management Agency (RMA) provided no provisions for rating premium 
for 1996 Tobacco Agreements by removing the practice from County Actuarial 
Documents.  Therefore, Tobacco Agreements were not valid for the 1996 crop 
year.  It has been brought to our attention that in some cases Tobacco 
Agreements were carried over with crop insurance policies from 1995 by 
reinsured companies.  Also, several Tobacco Agreements were issued by means 
of written agreements through an RMA Regional Service Office.  

Action:

No additional premium will be charged for acreage erroneously covered by a 
1996 Tobacco Agreement.  Reinsured companies are authorized to revise 1996 
acreage reports to delete additional premium charged for Tobacco Agreements.  
If necessary, companies should correct premium billings to reflect the 
changes and refund all additional charges for 1996 Tobacco Agreements, which 
have been paid.  Furthermore, Tobacco Agreements should not be issued for 1997 
and subsequent crop years.

For the purpose of loss claim form completion (appraisal worksheets, claim 
forms, etc.), crop insurance providers are to make pen and ink changes in the 
appropriate handbooks to substitute "machine harvest" for references to 
"tobacco agreement" and "hand harvest" for references to "no agreement".  
The tobacco handbook will be updated to reflect these changes when reissued or 
slipsheeted.