December 23, 1998

INFORMATIONAL MEMORANDUM:  R&D-98-075

TO:      	All Reinsured Companies
    		All Risk Management Agency Field Offices

FROM:    	Tim B. Witt         /s/ Tim B. Witt
    		Deputy Administrator
    
SUBJECT:        Citrus Dollar Plan Pilot Program Participation

BACKGROUND:

California Citrus Mutual and Sunkist growers have requested the Risk Management Agency
(RMA) to develop a pilot program for a Dollar Plan of Insurance for Arizona and California
Citrus.  The Federal crop insurance program currently available for Arizona and California citrus
provides a production-based actual production history (APH) guarantee.  Although more than
half of the eligible Arizona-California citrus acreage is insured, citrus industry representatives
have indicated that a Dollar Plan will likely meet producers' needs even more than the current
program.

California has about one-fourth of the million acres of citrus in the United States according to 
the National Agricultural Statistics Service (NASS).   Navel oranges are the most important
citrus crop grown in California, accounting for 45 percent of citrus acreage and 36 percent of
citrus crop values from 1995 through 1997.  Valencia oranges and lemons each accounted for
about 27 percent of California citrus crop values.  NASS estimated the value of California navel orange
crops averaged $309 million from 1995 through 1997.

California navel oranges are harvested and sold during a 25-week period, with the highest
shipment volume from December through March.  Typically a third of the trees are picked in one
of three harvests between November and June.  Winter damage is most likely to result from cold
temperatures in isolated areas or sudden temperature drops during an unusually warm winter.  
Widespread and severe freezes, such as occurred in December 1990, are rare in California citrus-growing areas.  
Diane Bertelsen, in the Davis Regional Service Office (RSO), is project manager and Ron
Lundine is coordinating the project development in the Kansas City Office.  Some citrus and
insurance industry representatives have provided input in the development of a preliminary
project proposal which is available from the Research and Evaluation Division at (816) 926-6343
or the Davis RSO at (530) 792-5875.

ACTION:

Insurance providers or other parties wanting to participate in the development of the pilot
program for Arizona and California Citrus fruits should provide their representative's name,
address, and phone number to Ron Lundine or Diane Bertelsen, by January 6, 1999.  They can be
reached at:

  Ron Lundine                                    Diane Bertelsen
  Risk Management Agency, USDA                   Risk Management Agency, USDA
  Research and Evaluation Division               Regional Service Office
  P. O. Box 419293                               430 G Street, Dept. 4168
  Kansas City, MO 64141                          Davis, CA   95616-4168
                 
  Phone: (816) 926-3854                          Phone: (530) 792-5875
  Fax: (816) 926-7343                            FAX:   (530) 792-5893
  E-mail: Ronald_Lundine@rm.fcic.usda.gov        E-mail: Diane_Bertelsen@rm.fcic.usda.gov
    
DISPOSAL:

This Informational Memorandum is for the purpose of transmitting information and the
expiration date is January 31, 1999.