INFORMATIONAL MEMORANDUM:  R&D-95-003

TO:         All Reinsured Companies
            CFSA Headquarters, State, and County Offices
            All Risk Management Field Offices

FROM:       Tim B. Witt     /s/ L. E. Stiffler (for)
            Research and Development Division

SUBJECT:    Category C Perennial Crop Field Inspections


ISSUE:

Changes have been made to the Category C perennial crop yield determination 
methodology for the 1995 crop year, with most yield determinations previously
completed by Regional Service Offices (RSO's) now being certified by the
producer.  These changes were made to simplify the program; to effectively
manage the volume of business anticipated for 1995; and to test the impact of
producer certification on the program.  Questions have been received regarding
the number of field inspections that must be performed using the yield
variance table (Section 5, Par E (7) (d) page 86 of the Catastrophic Risk 
Protection Handbook (CAT)). 

BACKGROUND:

The Federal Crop Insurance Corporation (FCIC) has re-evaluated the tolerance 
selection criteria for perennial crops.  As a result, the number of required 
inspections can be reduced in most circumstances.  The CAT handbook will be 
amended by authorizing RSO's to issue criteria that reduce the number of 
policies selected by this criterion for production areas within each region.  
The 1995 Crop Insurance Handbook, FCIC 18010, which applies to limited and 
additional coverage, also will be updated to include these procedures.

ACTION:

For the 1995 crop year, insurance providers will be required to conduct field 
inspections, based on the yield variance table, on no more than 10 percent of 
their book of business for the crop in each RSO's area unless FCIC determines 
that actuarial integrity will be impaired.  If situations arise where 
tolerance selection criteria appear to cause excessive field inspections, 
please contact the applicable RSO or the Product Development Branch at (816) 
926-7387.