December 19, 1997     
     
     INFORMATIONAL MEMORANDUM: R&D-97-094
     
     TO:       All Reinsured Companies
               All Risk Management Field Offices
     
     FROM:     Tim B. Witt    /s/   Tim B. Witt
               Deputy Administrator
     
     SUBJECT:  1998 Group Risk Plan (GRP) Forage Production
     
     BACKGROUND:
     
     Guarantees under Group Risk Plan (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
     identified 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.
     
     Risk Management Agency (RMA) solicited comments from reinsured companies
     and Regional Service Offices regarding what actions might be most
     appropriate to take, through Informational Memorandum: R&D-97-075 on
     October 10, 1997.  RMA received approximately 15 responses, which
     identified a clear consensus of the actions RMA should take.
     
     ACTION:
     
     RMA will allow downward revisions to the 1998 GRP forage production
     acreage report through May 15, 1998, to account for plowing under of
     acreage lost to winterkill (since the contract change date for 1998 GRP
     forage production has passed).  In addition, RMA will proceed with
     updating the GRP forage special provisions for 1999 and succeeding years
     to reflect a permanent change in the acreage reporting date.