August 3, 1998



INFORMATIONAL MEMORANDUM: R&D-98-037

TO:      	All Reinsured Companies
    		All Risk Management Field Offices

FROM:    	Tim B. Witt         /s/ Roberta E. Waggoner (for)
    		Deputy Administrator

SUBJECT: Palmer Drought Severity Index

BACKGROUND:

Abnormally dry conditions have delayed planting in several areas.  Prevented planting questions
have been raised regarding use of the Palmer Drought Severity Index (Index).  

Section 17(d)(1) of the Common Crop Insurance Policy Basic Provisions, effective beginning
with the 1998 spring crop year, specifies that drought will be considered an insurable cause of
loss for  prevented planting purposes only if, on the final planting date, the area that is prevented
from being planted is classified by the Index as being in a severe or extreme drought.

The Index is updated weekly.  The Federal Crop Insurance Corporation (FCIC) has received
several questions as to which weekly Index to use when the final planting date falls between the
issuance of two Indexes (for example, the Index was updated for the week ending June 13, 1998,
and for the week ending June 20, 1998, but the final planting date was June 15, 1998).  When the
Index changes from one week to another, it may not be possible to determine the exact date
within the weekly Index that triggered the new classification (for instance, if the Index for the
week ending June 13 classified an area as 3.0 (severe drought) but due to heavy rains the
following week, the Index for the week ending June 20 classified the same area as 2.8 (moderate
drought).  Although the final planting date fell within the Index for the week ending June 20, it
may not be possible to determine what the classification was on the final planting date because
the Indexes are not issued daily).

ACTION:

When the Index changes from severe to moderate drought and vice versa from one week to
another and it is not possible to determine the exact date within the weekly Index that triggered
the new classification, the weekly Index that classified the area as severe drought will be used.