INFORMATIONAL MEMORANDUM:  R&D-97-075
   
TO:      All Reinsured Companies
         All Risk Management Field Offices
         
FROM:    Tim B. Witt      /s/ Tim Hoffmann   10/10/97
         Deputy Administrator
         
SUBJECT: 1998 Group Risk Plan (GRP) Forage Production Change
     
     
The GRP forage production contract was a pilot program for the 1994 crop
year in Minnesota and Wisconsin.  It was expanded to selected counties
in Colorado, Montana, North Dakota, Oklahoma, Pennsylvania, and Wyoming
for the 1998 crop year.
     
Guarantees under GRP forage production use a trend projection of next
year's yield based on National Agricultural Statistics Service (NASS)
harvested yields for the county, and uses the insurance year NASS
harvested yield for the county as the basis for loss determination.
     
The 1997 crop year brought weather conditions to areas of Wisconsin and
Minnesota that resulted in winterkill damage to some forage acres, which
highlighted a weakness in the product.  Producers who purchased GRP
forage production for the 1997 crop year insured all forage acres as of
the acreage reporting date, and paid a premium for each of those acres.
However, forage acres totally lost to winterkill are typically plowed
under and cannot be reflected in the NASS harvested acreage for the crop
year.  As a result, GRP forage production offers little assistance when
winterkill occurs if one assumes that acreage that is harvested has no
reduced yield due to the winterkill.
     
The Risk Management Agency would appreciate your consideration and
comment on the following options to address this issue:
     
-    Allow downward revisions to the GRP forage production acreage 
     report through May 15, 1998, to account for plowing under of 
     acreage lost to winterkill.
     
-    Change the GRP forage production acreage reporting date to May 15, 
     1998.
     
-    Make no change to the GRP forage production program for the 1998
     crop year.     
   
The contract change date for the GRP forage production program for the
crop year has passed. Therefore, any program changes for the 1998 crop
year must be considered under the Liberalization provision of the Basic
provisions.
     
Please provide any comments or other recommendations you may have by COB
Friday, October 31, 1997, to Vondie O'Conner, Research and Evaluation 
Division.