BULLETIN NO.:  MGR-97-039

TO:       All Reinsured Companies
          All Risk Management Field Offices

FROM:     Kenneth D. Ackerman /s/  11-21-97
          Administrator

SUBJECT:  Acreage Determination and Verification for the 1998 Crop Year and
Submission of 1997 Acreage Review Results

BACKGROUND:

The Risk Management Agency (RMA) has been requested to finalize the acreage
determination procedures for the 1998 crop year as early as possible.  RMA
expects that the number of voluntary acreage certifications at local Farm
Service Agency (FSA) offices will continue to decline, therefore increasing
the need for the crop insurance program to develop timely procedures to
ensure accurate acreage certification by producers and efficient and
effective verification methods for insurance providers.  The acreage
determination and verification procedures in effect for the 1997 crop year
were revised to reflect a need for higher levels of review to assess program
vulnerability and producer responsibility in reporting acreage for insurance. 
The results of the 1997 acreage certification reviews are to be provided to
RMA at the close of the 1997 crop year.  Although the 1997 results are not
yet available, RMA has received few questions or complaints about the current
procedure.  

Based on the limited number of negative comments received on the 1997
procedure, RMA has decided to use the same criteria for the 1998 crop year. 
Once the 1997 acreage review reports have been received and evaluated, RMA
will determine if any modifications should be made for 1998 spring crops.  As
in 1997, RMA authorizes insurance providers to use the following procedures
as an alternative to using acreage information from local FSA offices for
claim purposes.

ACTION:

For the 1998 crop year, insurance providers must use the 1) acreage
determination, 2) determining insurable share, and 3) entities procedures
that were incorporated into the FCIC-25010 Loss Adjustment Manual (also known
as General Loss Adjustment Standards) for 1997.  These procedures will not be
materially changed for 1998.

Items, forms, and services available from local FSA offices for the 1998 crop
year include; (1) copies of aerial photos, (2) official field measurement
(i.e., boundaries of field have not changed), (3) fly overs of growing crops
(may not be as comprehensive as in the past), and (4) measurement service.
Farm Serial Numbers will continue to be maintained showing the
owner/operator and crop land acres.  The FSA-423, -424, and -425 will
continue to be provided to reinsured companies free of charge at least
through October 1, 1998, along with copies of aerial photos, and other forms
needed to perform policy sales and service.  Acreage determinations that can
be made by local FSA county offices (e.g., planimeter measurement of a
partial field) may be requested by reinsured companies.  (NOTE: FSA may
charge for this service.)

1998 Review Requirements

Reinsured companies must select "5 percent" of claims assigned for loss
adjustment inspections.

(1)  The selection may be made based upon either: 

(a)  A random 5 percent selection of claim units, or

(b)  Random selection of a sufficient number of policies with claims to result
in 5 percent of the claim units.

(2)  During the loss adjustment inspection process of these selected units,
the acreage must be measured if:

(a)  Part of a unit is released and the part released will lose its field
identity,

(b)  Acreage has not been previously measured for the crop year or DOES NOT
fit the criteria for measured acres (as defined in the acreage determination
section of the Loss Adjustment Manual),

(c)  Measured acreage is not acceptable or there is reason to question the
accuracy of the measurement,

(d)  The insured does not agree with the measured acreage, or

(e)  Acres of varying practices, types, appraisals, etc. (as appropriate to
separate on the claim), are not separated.

(3)  The loss units selected will be identified in a way that the units
selected can be identified for compliance/audit review.

For ALL claim inspections requiring determined acres, the method of acreage
determination and any calculations used to arrive at the determined acres
must be documented in the narrative of the claim or on a special report
attached to the claim (e.g., "determined acres using crop insurance acreage
report - would measure within 5 percent").

Whenever acreage measurements are required, measurements must be made by the
FSA, a reinsured company, or other firm engaged in the business of land
measurements, and these measurements must be made by using any of the
measurement methods described in the "Acreage Determination" section of the
LAM.

Insurance Provider 1998 Reporting and Follow-up

Reinsured companies will submit a report to RMA at the end of the 1998 crop
year indicating the results of the random acreage reviews conducted for 1998.
These reports will include the following information.

(1)  The number of loss units reviewed.

(2)  The number of acreage reporting discrepancies identified in four
categories.

(a)  Units reviewed with no acreage discrepancies.

(b)  Units reviewed with acreage discrepancies between 0.1 and 5.0 percent.

(c)  Units reviewed with acreage discrepancies between 5.1 and 10.0 percent.

(d)  Units with discrepancies exceeding 10.0 percent.

Discrepancies will include both over or under-reported acres.  In addition,
policyholders will be required to provide a written explanation for any unit
which is over or under-reported by more than 10 percent.  The written
explanation shall be reviewed and signed by the reinsured company and placed
in the policy file.

1997 Final Reports Due to RMA

The 1997 review reports should be submitted no later than January 31, 1998 to:

USDA, Risk Management Agency 
Director, Claims and Underwriting Services
1400 Independence Ave, S. W.  STOP 0803
Washington, D. C.  20250-0803