INFORMATIONAL MEMORANDUM: R&D-95-021 TO: All Reinsured Companies All Risk Management Field Offices CFSA Headquarters, Program Delivery and Field Operations FROM: Tim B. Witt Acting Director Research and Development Division SUBJECT: Winter Wheat Freeze Damage ISSUE: Widespread freeze has affected a large number of wheat acres in Texas, Oklahoma, and Kansas. Assessing this type of damage is a critical part of the appraisal process, and it is vital that appropriate procedures are followed. DISCUSSION: Duties of the insured in the event of damage or loss are described in the Basic Provisions. Paragraph 14(a)(3) states: ". . . leave representative samples intact for each field of the damaged unit as may be required by the Crop Provisions. Paragraph 14(b) of the Basic Provisions further states: "You must obtain consent from us before, and notify us after you: (1) destroy any of the insured crop which is not harvested; (2) put the insured crop to an alternative use; (3) put the acreage to another use; or (4) abandon any portion of the insured crop. We will not give such consent if it is practical to replant the crop or until we have made an appraisal of the potential production of the crop. Appraisals must not be made until an accurate appraisal of potential production can be made. Appraisals may be deferred to a later date in order to assess crop recovery and obtain a more accurate appraisal. When freeze damage has occurred, defer appraisals at least 7-10 days from the date of freeze. If at the end of the 7-10 day period an accurate determination cannot be made, use the recommendations of the university Extension Service or other like source recommendations for the length of time the appraisal should be deferred for the particular crop and situation. Deferred appraisals MUST be completed as soon as the production-to-count can be ACCURATELY determined. In widespread deferral situations, all insurance providers (CFSA State and county offices, companies through appropriate loss committees or trade associations, etc.) should maintain coordination through the appropriate Federal Crop Insurance Corporation (FCIC) Regional Service Office (RSO) so uniform guidance can be provided to all insurers regarding the length of deferral time necessary to allow accurate appraisals to be made for the circumstances. If the insured wants immediate release of crop acreage in order to put the acreage to another use, the insured must either accept the appraisal or agree to leave representative sample areas. The Small Grains Crop Provisions, section 11., paragraph (c)(1)(iv)(A) provides as follows: "If agreement on the appraised amount of production is not reached, you may elect to continue to care for the crop, or we will give you consent to put the acreage to another use if you agree to leave intact, and provide sufficient care for, representative samples of the crop in locations acceptable to us. The amount of production to count for such acreage will be based on the harvested production or appraisals from the samples at the time harvest should have occurred. If you do not leave the required samples intact, or you fail to provide sufficient care for the samples, our appraisal made prior to giving consent to put the acreage to another use will be used to determine the amount of production to count." When the insured does not want to leave representative sample areas prior to the headed stage, the appraisals will be made based on the "Before Heading Method." All live tillers will be counted as potential production without regard to any head damage while the head is still in the boot. If the insured does not agree with the appraisal then representative sample areas must be left until the time harvest should have occurred as outlined in the small grains crop provisions. The representative sample areas are to (1) be sufficient to provide accurate appraisals of the crop in accordance with the minimum recommendations for representative samples in the crop handbook; (2) include "buffer" areas to ensure that the actual appraised samples will not be exposed to damage in excess of what would be experienced had the crop around the sample areas remained intact (for example, excessive drying, insect or weed infestation, grazing, etc.); (3) be in locations acceptable to and identified by the insurance provider (by flags, physical markings, and/or sketch map as necessary to protect the integrity of the samples and their locations); and (4) not be located at the edge of the field or in other areas that fail to be representative of the acreage being appraised. NOTE: It may not be possible for the insurance provider to make a farm visit to identify and mark the acceptable locations of the representative sample areas before the insured needs to put acreage to another use. If this is the case, and the insured's notice of damage has been documented, the insurance provider may authorize the insured, on a case-by-case basis, to leave intact, two or more representative strips of the crop (per field) at least 10 feet wide and the entire length of the field for appraisal purposes. For some situations such as contour farming, or row crop plantings with the rows planted in a direction other than the length of the field, it may be more practical that the strips not actually be the entire "length" of the field. Document in writing on the claim or a special report for stating facts, agreement with the insured on the approximate location of the strips authorized to be left for appraisal purposes when advance identification and marking of the fields is not possible. Example 1: "Insured needs to chisel ground immediately, is authorized to leave two strips of the crop intact, each at least 10 feet wide and the length of the field, approximately one-third in from each edge of the field." Example 2: "Insured must destroy immediately, is authorized to leave two strips of the crop intact (one in the poorer area and one in the better area of the field), each at least 10 feet wide and containing the longer rows following the contour planting)." Include the reason for immediacy, date, authorization method (by phone, in person, etc.), and name of the person providing the authorization. Authorization is to be provided ONLY by individuals authorized to adjust losses. Any strips are to comply with the representative sample requirements specified in (1), (2), and (4) of the previous paragraph. It is not intended that this authorization be utilized on a routine basis to avoid advance identification of acceptable sample areas for appraisal purposes. SUMMARY: Insurance providers are to comply with the above guidelines in handling winter wheat notices of damage related to the freeze. Loss adjustment manuals are being updated to incorporate these clarifications regarding representative sample areas for similar circumstances.