BULLETIN NO.:  MGR-97-019
     
TO:       All Reinsured Companies
          All Risk Management Field Offices
          FSA Headquarters, Program Delivery and Field Operations
     
FROM:     Kenneth D. Ackerman /s/ S. Dittrich 05/23/97
          Administrator 
     
SUBJECT:  Delivery of Crop Insurance Policies for the 1998 Crop Year 
          and Beyond
     
     
BACKGROUND:
     
The Federal Agricultural Improvement and Reform Act (the 1996 Act)
authorized the Secretary of Agriculture to continue to sell crop 
insurance directly through Farm Service Agency (FSA)local offices only 
if there is an insufficient number of private insurance providers selling 
catastrophic level of crop insurance (CAT) in the area.  The following is 
the text of a press release announced today.
     
ANNOUNCEMENT BY THE SECRETARY:
     
Secretary Dan Glickman today announced that crop insurance will be
available exclusively through crop insurance agents, beginning in the 
1998 crop year.  Previously, the catastrophic level of crop insurance 
(CAT) was available through both local USDA Farm Service Agency offices 
and crop insurance agents in 36 States.

"While the sales and servicing of policies will be done by the private
sector, " Glickman said, "this change will not weaken the existing 
safety net for producers.  I am determined that everyone will have access 
to crop insurance -- large farmers and small farmers alike, especially 
those with limited resources, minorities and producers in all areas of the 
country."
     
"Private company representatives have given me their commitment to reach
out to all America's farmers and to assure that the highest level of risk
management service is extended to everyone," Glickman said.  " I look
forward to this partnership."
     
Glickman said this decision was made after carefully reviewing the number
of crop insurance agents in each State to ensure that an adequate sales
force is in place to provide all farmers with CAT coverage.  This review is
required by the 1996 Farm Bill which also requires USDA to transfer the
sales of CAT coverage entirely to the private sector if a sufficient number
of agents are available in each State to provide this service.
     
USDA will continue to subsidize all policies, establish policy terms and
conditions, set rates, and guarantee funds for the payment of approved
claims. 
     
The transfer begins with 1998 fall planted crops.  Policyholders will
receive a letter informing them of this change in about one month.
However, producers are to continue to go to the local FSA office for
service on 1997 policies.  This includes reporting 1997 planted acreage and
production as well as any losses.
    
Although a producer's policy will be randomly transferred from USDA to an
insurance company, producers may select another agent or insurance company
if they do so before the sales closing date for the insured crop.  To
ensure that all producers are served, insurance companies are required to
insure all eligible crops, and provide all levels of coverage in the
States in which they operate.  Further, participating companies must insure
all qualified applicants.  Waiver of administrative fees for producers who
qualify as limited resource farmers is required by the Risk Management
Agency and is available through private companies.  Private agents are
prepared to assist those qualifying producers with certification of their
status.
     
A listing of local crop insurance agents is available in all FSA county
offices.
     
ACTION:
     
RMA will advise reinsured companies of transfer procedures via a subsequent
bulletin to be issued in the near future.