May 22, 1998


INFORMATIONAL MEMORANDUM: R&D-98-018

TO:      All Reinsured Companies
         All Risk Management Field Offices
                 
FROM:    Tim B. Witt    /s/ Beth Huffman for
         Deputy Administrator 
         
SUBJECT: 1999 Income Protection--Wheat Crop Provisions and Expansion 

BACKGROUND:

The Board of Directors of the Federal Crop Insurance Corporation (FCIC) has approved the
expansion of the Income Protection - Wheat pilot program to counties with sufficient data for
rating fall-seeded wheat in Montana, Oregon, South Dakota, and Washington.  The Income
Protection -Wheat pilot program continues to be available in selected counties in Idaho, Kansas,
Minnesota, and North Dakota. 

ACTION:

The Income Protection - Wheat Crop Provisions, a Summary of Changes, and a revised Premium
Calculation Worksheet (revises the subsidy calculation) for the 1999 and succeeding crop years
are available electronically via the Reporting Organization (RO) server and covers the existing
and expansion pilot program wheat counties.  The FCI-35 Coverage and Rate Tables and Special
Provisions of Insurance for the existing and expansion counties with fall-seeded wheat will be
available on the RO server with the June 30 contract change date actuarial release.  

If you have any questions about this pilot program, please contact Vondie O'Conner at
(816) 926-6343 or by fax at (816) 926-7343.

Attachment
                             Premium Calculation 
                            (INCOME PROTECTION)
              Effective for the 1999 and Succeeding Crop Years

For Catastrophic Insurance Coverage:   No premium calculations are necessary.
For Additional Coverage:          Complete all steps.

FOR EACH CROP
1.    Producer IP Approved Yield times Projected Price times net acres.


2.    Enter the amount of protection (Answer 1 times selected Coverage Level).


3.    Enter the Base Premium Rate for the selected Coverage Level (Base Premium Rate in the cell that
      intersects with the IP Approved Yield and the County Average Yield).


4.    Base Premium  (Multiply answer 2 times answer 3).


SUBSIDY


5.    Enter  (Answer 1 times 50 percent Coverage Level).


6.    Enter the Base Premium Rate for the 50 percent Coverage Level (Base Premium Rate in the cell that
      intersects with the IP Approved Yield and the County Average Yield).



7.    Base Premium to calculate subsidy (Multiply answer 5 times answer 6).



8.    Subsidy (Multiply Answer 7 times .55 if the selected coverage level in Answer 1 is less than 65 percent,
      or .75 if the selected coverage level is 65 percent or greater.)                               


PRODUCER PREMIUM

9.    Estimated Producer Premium (Subtract Answer 8 from Answer 4). 













THIS WORKSHEET IS INTENDED TO ASSIST IN ESTIMATING PRODUCER PREMIUM ONLY.
Date: 05/18/98