INFORMATIONAL MEMORANDUM: R&D-98-019

TO:           All Reinsured Companies
              All Risk Management Agency Field Offices          
              Other Interested Parties
    
FROM:         Tim B. Witt        /s/ Tim B. Witt    6/1/98
              Deputy Administrator
    
SUBJECT:      Fresh Market Snap Bean Pilot Crop Insurance Development

BACKGROUND:

The Risk Management Agency (RMA) is researching the feasibility of a pilot insurance program
for fresh market snap beans.  RMA currently reinsures a processing bean individual yield
guarantee crop insurance program that is limited to processing beans grown under a processor
contract.  About 80 percent of the snap beans produced in the United States are grown for
processing, while 20 percent are grown for the fresh market. 

Snap beans are grown across the United States, and are marketed either fresh or processed
(canned and frozen).  Fresh market snap bean production is dominated by the Southern States,
especially by Florida and Georgia.  Fresh market snap bean production was approximately 409
million pounds in 1995, unchanged from 1994.  Fresh market snap bean output in 1994 was
valued at $150.7 million.  See the attached table for individual State statistics.

Disaster assistance payments for fresh market snap bean losses totaled $20.6 million from 1988
to 1993.  Fresh market snap beans accounted for 61 percent of all snap bean disaster payments. 
In terms of State ranking, 81 percent of total disaster payments for fresh market snap bean losses
during 1988 to 1993 were made to Tennessee, Georgia, Michigan, North Carolina, Florida,
Alabama, Virginia, Texas, New Jersey, and South Carolina producers.  Lack of moisture, wet
conditions, hail, and freeze were the major causes of loss during this period.  A report on the
Economic Assessment of the Feasibility of Providing Multiple-Peril Crop Insurance prepared by
the Economic Research Service is available via the RMA home page at
http://www.fcic.usda.gov.

RMA has a snap bean development team comprised of personnel from Regional Service Offices
and Research and Development in Kansas City to develop a fresh market snap bean pilot
insurance product.  Dave Sherman of the Valdosta Regional Service Office is the team's project
manager.
ACTION:

Insurance providers wanting to participate in the development of the fresh market snap bean pilot
program should provide, by June 25, 1998, their name, address, and phone number to:

Charles Naglich
Research and Evaluation Division
Risk Management Agency
P. O. Box 419293
Kansas City, Missouri 64141
Phone: (816) 926-1832
Fax: (816) 926-7343


AttachmentTable for snap beans for fresh market:  Area planted and harvested, yield per acre, production,
and value of production, by State and United States, 1993-94.
                                                                                                             
      1993-1994                                             
  
State    Area               Area       Yield
                       planted            harvested         Per Acre          Production           Value
                                                                                                                                                      
                        -----------Acres-----------           Cwt                 1,000 Cwt        1,000 Dollars

California    7,500      7,500        70          525      30,030
Florida            26,900  23,100    51           1,178         52,185
Georgia     18,000      14,000         41   574                 16,072
Hawaii        80      80   40           3                       300
Maryland         2,500      2,400       28         67       2,144
Michigan    2,200       2,000           50                           100            2,380
New Jersey    4,200     4,100           30            123       4,182
New York    5,200          4,600      105         483      13,572    
North Carolina   7,300             7,100           35                 249       7,221
Ohio         2,000           1,800     58          104                2,839
South Carolina   2,700           2,300      26        60                  2,310
Tennessee     9,900     8,800         46              405                 11,583
Virginia    5,200           5,100     44          424      5,869

United States           93,680              82,880         49   4,095               150,687

Source: USDA, National Agricultural Statistics Service.