INFORMATIONAL MEMORANDUM: R&D-98-021

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: Summer Squash or Pumpkin Pilot Program Participation

BACKGROUND:
 
The Risk Management Agency (RMA) is researching the feasibility of a pilot insurance program
for summer squash and pumpkins.  The following is a summary of where the crops are grown
and the distribution of previous disaster assistance payments.

Squash

Squash is grown throughout the United States.  The Department of Agriculture's National
Agricultural Statistics Service (NASS) does not collect data on squash and pumpkins, therefore,
it is difficult to determine total U.S. production.  The State Departments of Agriculture in
California, Florida, and Michigan, however, do collect basic data.  Information collected by the
Economic Research Service (ERS) indicates that the five leading States in acreage are Florida,
California, Georgia, Michigan, and Texas-- accounting for an estimated 55 percent of total
acreage.

RMA is currently developing a winter squash pilot insurance program.  The proposed
implementation of this pilot will be the 1999 crop year.  Because of the differences in production,
harvesting, and marketing between summer and winter squash, the winter squash is being
developed as a stand-alone pilot program.

ERS assesses that the demand for squash insurance will be strong among growers in the
southern, northeastern, and north central regions.  The States receiving the largest disaster
assistance payments in order of ranking were Georgia, Florida, Michigan, New Jersey, and
Texas. These five States accounted for $42.5 million, or 68 percent, of disaster assistance
between 1988 and 1993.  Interest in crop insurance is enhanced by the fact that squash is
typically grown in areas where tomatoes, peppers, and other row crops are currently insured.  The
Research and Evaluation Division has received 43 requests for squash insurance covering the
States of Florida, Indiana, Minnesota, Nebraska, and Tennessee.






Pumpkins

U.S. growers harvested 63,260 acres of pumpkins in 1992.  California, Illinois, and New York
are the top three pumpkin producing States, accounting for 29 percent of the 1992 harvest. 
Pennsylvania, Indiana, and Texas ranked fourth through sixth in acreage harvested.  Illinois
accounted for 13 percent of U.S. pumpkin acreage in 1992.  In contrast, the States receiving the
largest disaster assistance payments in order of their ranking were Ohio, Tennessee, Michigan,
Texas, and New Jersey.  These five States accounted for $9.67 million or 39.1 percent of the 
disaster assistance between 1988 and 1993.  The RED has received eight requests for pumpkin
insurance covering the States of Indiana, Minnesota, Nebraska, Pennsylvania, and Tennessee.

The feasibility studies can be obtained by contacting RED at (816) 926-6343.  Insurance
providers or any other party interested in participating in the development of a summer squash,
pumpkin, or both programs are invited to designate a representative or representatives from their
organization to work with RMA on these products.

ACTION:

Robert Ibarra, of the Valdosta RSO, is the Project Manager for the summer squash and pumpkin
pilot insurance programs.  Charles Naglich, RED, is the Kansas City liaison for the development
team.  Insurance providers wanting to participate in the development of the summer squash
insurance pilot program or the pumpkin insurance pilot program (either one or both), should
provide their name, address, and phone number to Charles Naglich, by June 10, 1998.  Charles
can be reached at the following address:

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