BULLETIN NO.:  MGR-98-014

TO:       All Reinsured Companies
          All Risk Management Field Offices
          All Other Interested Parties

FROM:     Kenneth D. Ackerman  /s/Robert J. Prchal   6/10/98
          Administrator

SUBJECT:  1998 Cotton Acreage Affected by Drought Conditions in Texas, New Mexico, and
          Oklahoma 


BACKGROUND:

Dry conditions throughout much of Texas, New Mexico, and Oklahoma has severely impacted
cotton acreage in many parts of these States.  Generally, under these conditions, acreage 
planted after the final planting date has a reduced chance of reaching full maturity 
before the frost/freeze date for the area.

Reports on the drought are comparing it with some of the worst dry periods in history.  The
current year-to-date figures are worse in some parts of Texas than were recorded in the drought
of 1956 or the recent dry conditions experienced in 1996. 

The FCIC 30090-1, Cotton Handbook as amended through July 1997, provides for an appraisal
deviation for releasing dry planted non-irrigated cotton acreage seven days after the 
applicable published final planting date under abnormally dry conditions.  This deviation 
may be authorized when little or no rain occurs in a cotton growing area and insured 
producers dry-plant non-irrigated cotton acreage by the applicable final planting dates 
for the county. 

ACTION:

For the 1998 crop year only, a deviation is being authorized in Texas, New Mexico, and
Oklahoma with published cotton final planting dates of May 31 through June 20.  This
authorization allows insurance providers to release non-irrigated cotton acreage that 
has been dry planted by the final planting date to be put to another use as follows:

Where no moisture has been received on insurable cotton acreage from planting through the 
7th day after the applicable final planting date, the acreage may be released on the basis 
of the plant count at the time of the appraisal.  The appraisal is to be conducted no sooner 
than the 8th day after the final planting date.

Where measurable moisture is received on insurable cotton acreage from planting through the 
7th day  after the applicable final planting date, the acreage will not be released on the 
basis of the plant count at the time of the appraisal until at least the 15th day after the 
final planting date.

In all other cases, where acreage is released beyond the 15th day after the applicable 
final planting date, the appraisal will reflect the results of the appropriate appraisal
method based on the stage of growth at the time of the appraisal.

Insurance providers are reminded that the policy provisions regarding preventing planting 
for drought were changed for the 1998 crop year.  The new basic provisions, 
Section 17(d)(1), state:
"For non-irrigated acreage, the area that is being prevented from being planted is 
classified by the Palmer Drought Severity Index (PDSI) as being in a severe or 
extreme drought."  Insurance providers should maintain documentation to support the 
applicable PDSI designation for any drought-related prevented planting claims processed 
for 1998.