June 28, 1995

BULLETIN NO.: MGR-95-029

TO:      All Reinsured Companies
         CFSA Texas State Office
         All Risk Management Field Offices

FROM:    Kenneth D. Ackerman
         Acting Deputy Administrator
         
SUBJECT: 1995 Loss Adjustment Deviation Approval for South Texas Cotton

BACKGROUND:

Producers in South Texas are in the midst of a drought that has severely 
impacted agricultural production.  Although most of the corn and grain sorghum 
will be carried to harvest, cotton acreage that has failed or partially failed 
may be better put to another use prior to harvest. Risk Management has 
reviewed conditions in four South Texas counties to assess the request that 
the Consolidated Farm Service Agency approve an immediate appraisal deviation 
for the 1995 crop year.

In addition to the drought there has also been a dramatic increase in damaging 
insects this year, requiring additional applications of insecticide, and 
significantly raising the cost of continuing production.  In a "normal" crop 
year, appraisals would be made via the stand reduction method until around 
July 15.  The stand reduction method uses a plant count to determine potential 
production; however, this method would result in an appraisal far above the 
actual potential of this South Texas cotton crop.  Although the cotton plants 
appear healthy in many of the fields, non-irrigated plants are shorter than 
usual and boll size and count on irrigated and non-irrigated cotton has been 
significantly reduced.

ACTION:

Effective immediately, insurance providers are authorized to use the boll 
count appraisal method for cotton in Cameron, Hidalgo, Starr, and Willacy 
Counties Texas.  In recognition of the reduced boll size due to drought, green 
bolls will be counted at 500 per pound instead of the currently approved 250.  
Include: 1) only immature green and unopened bolls that will contribute to the 
ultimate yield at the time of harvest; and 2) only harvestable bolls that can 
be mechanically harvested by the intended method of harvesting, picker or 
stripper.  Open bolls will be counted according to existing procedure.  This 
deviation is effective for the 1995 crop year only.

During the review of crop conditions in the four county area, several cotton 
fields were noted with heavy weed infestations in contrast to most of the 
acreage inspected.  Producers who failed to care for their crop in accordance 
with the policy should be assessed for poor farming practices using approved 
procedures.

Specific instructions for adjusters:

1.  Verify that insurable causes have contributed totally to the reduced boll 
    size and the reduced number of bolls to count.  Otherwise, uninsured 
    causes are to be applied.

2.  Refer to this Bulletin number in the "Remarks" section of the appraisal 
    worksheet for authorization to use this deviation.

3.  Apply this deviation for appraisal from the effective date through the end 
    of the crop year for the four counties.

Insurance providers are reminded to exercise close supervisory controls over 
the application of this deviation.  As a reminder, "drought" can not be the 
cause for reduced boll size and numbers to count when the cotton is irrigated.