BULLETIN NO.:  MGR-96-066

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

FROM:       Kenneth D. Ackerman
            Acting Administrator

SUBJECT:    1997 APH Yield Adjustments for Peaches in Selected
            States


BACKGROUND:

During 1996, the peach crop in certain States was severely damaged
by freezing temperatures.  Peach production was less than would have
been experienced under normal growing conditions for several major
producing States.  Due to this freeze, the Federal Crop Insurance
Corporation (FCIC) explored potential methods for adjusting crop
insurance yields for these producers.

ACTION:

For the 1997 crop year only, in the States where peach insurance is
available, FCIC will administratively implement the following Actual
Production History (APH) yield adjustments for peach producers:

1     A 10 percent yield cup.  Approved APH yields may not decrease
      by more than 10 percent compared to the previous year's
      Approved APH yield, unless known tree damage has occurred or
      cultural practices have been performed that will reduce the
      insured crop from previous production levels.  A 5 percent
      premium surcharge will be required ONLY when the 10 percent
      cup is applied.  (See attached examples.)  

2     Waive use of the yield variance table for carryover insureds.
      The yield variance table is used to determine if a unit
      requires a field inspection and/or approval of the APH yield
      by the FCIC Regional Service Office (RSO).  

3     For new insureds, mitigate the number of inspections and RSO
      approved APH yields that would be caused by low 1996 actual
      yields when using the yield variance table.  For new insureds,
      low actual yields reported for the 1996 crop year WILL NOT be
      counted for yield variance table purposes.  (See attached
      example.)

























                                                          Attachment
  
                          PEACH EXAMPLES 
                   CUPS/PREMIUM SURCHARGE

Example 1, Carryover Insured:

The 1996 approved APH yield was 192, 90 percent of that yield
(Cup) = 173.  The actual average APH yield is 166.  In this
example, the 1997 approved APH yield is cupped at 173 and a 
5 percent premium surcharge applies.

                    1997 APH FORM

             Year     Acres      Yield
             1992     24.8         51
             1993     24.8        236
             1994     22.5        305
             1995     23.4        232
             1996     23.4          6
                      830/5   =   166

An inspection and an FCIC RSO approved yield are NOT required.
Use of the yield variance table is waived for carryover insureds. 

Example 2, Carryover Insured:

The 1996 approved APH yield was 187, 90 percent of that yield
(CUP) = 168.  The actual average APH yield is 174.  In this
example the 1997 approved APH yield will be 174. Since the cupped
yield was not applicable, the 5 percent premium surcharge does
not apply.

                    1997 APH FORM

             Year     Acres      Yield
             1992     105.5       104
             1993     105.6       140
             1994      96.7       348
             1995      99.9       271
             1996      99.9         6
                      869/5   =   174



Example 3, New Insured:

                    1997 APH FORM

             Year     Acres      Yield
             1992     46.8        345
             1993     46.8        322
             1994     44.0        124
             1995     42.2        116
             1996     42.2         16
                     923/5    =   185

Since this is a new insured, use of the yield variance table is
required.  Disregarding 1996, the unit still has two actual
yields (1994 and 1995) that are less than 75 percent of APH
average yield.  An inspection and an FCIC RSO approved APH yield
ARE required.