BULLETIN NO.:  MGR-96-012.1

TO:       All Reinsured Companies
	  FSA Headquarters, Program Delivery and Field Operations
	  All Risk Management Field Offices

FROM:     Kenneth D. Ackerman
	  Acting Administrator
	  
SUBJECT:  Actual Production History (APH) Yields for Acreage Emerging From 
		  the Conservation Reserve Program (CRP)

BACKGROUND:

Manager Bulletin, MGR-96-012, issued March 26, 1996, discussed the insurability 
of acreage emerging from the Conservation Reserve Program (CRP), provided a 
chart that illustrated conditions that would be encountered when determining 
APH yields, and summarized APH procedures for those conditions.  During the 
1996 crop year, the Risk Management Agency received concerns regarding the 
use of standard APH procedures for acreage emerging from CRP for certain 
conditions.  The concerns generally regarded insureds who could not provide
acceptable acreage and production records for crop years prior to enrolling 
the acreage in CRP.  In some situations, standard APH procedures required the 
use of 65 percent of the Transitional Yield ("T" Yield). 

ACTION:

Beginning with the 1997 crop year, use the following procedure for acreage 
emerging from CRP that was contained in the insured's farming operation 
PRIOR to enrollment in CRP:  1) if the acreage is a separate unit or, 2) the 
entire farm (all cropland acreage) was previously enrolled in CRP.

1  The insured may provide acceptable production history for the year(s) the 
   crop was grown prior to the acreage's enrollment in CRP.  When production 
   history prior to the acreage's enrollment in CRP is provided, standard APH 
   procedures (including added land or added practice/type/variety (P/T/V) if 
   applicable) are used.

2  If the crop was grown prior to enrollment in CRP and acceptable production 
   history is not provided for such years:

   A   For acreage emerging from CRP that is a separate unit, calculate a 
       factored "T" Yield for each applicable P/T/V based on the greatest 
       number of years of records (actual and/or assigned yields) provided 
       for the crop on the reference unit's database consistent with added 
       land/P/T/V procedures.
       
	  Zero years, 65 percent;
	  One year, 80 percent;
	  Two years, 90 percent; or
	  Three or more years, 100 percent of the "T" Yield.

   B   For an entire farm operation (all cropland acres) enrolled in CRP, 
       the factored "T" Yield is 100 percent of the applicable "T" Yield.

3    For acreage that emerged from CRP in 1996 that is a separate unit or the 
     entire farm was enrolled in CRP and the 1996 approved APH yield was 
     calculated at 65 percent of the "T" yield, factored "T" Yields (see 
     paragraph 2) may also be used by insurance providers when updating those 
     APH databases for the 1997 crop year.  All carryover insureds must 
     provide production reports for the 1996 crop year as required by the crop 
     insurance contract.  

4    Approved APH yields previously calculated for the 1997 crop year that 
     qualify for factored "T" Yields as indicated in this bulletin,  may be 
     recalculated by insurance providers using this procedure.

5    Yield limitations will not apply when implementing factored "T" Yields.

6    The yield descriptor "C" must be used to identify factored "T" Yields.  
     Insurance providers must also document the reason for using the factored 
     "T" Yield by entering "CRP" in the "Other" block contained on the APH form 
     for the applicable APH database.  In subsequent crop years, the same 
     factored "T" Yield percentage is retained until the number of 
     actual/assigned yields provided for the database qualify for a higher 
     "T" Yield percentage or the database contains 4 years of 
     actual/assigned yields.

     For example: If a 90 percent factored "T" Yield is used to complete the 
     4-year database, 90 percent of the "T" Yield applies until 3 years of 
     actual/assigned yields have been provided.  Once 3 years of 
     actual/assigned yields have been provided, a 100 percent "T" Yield is 
     used to complete the fourth year.  When 4 years of actual/assigned 
     yields have been provided, a "T" is no longer used in the database.     

Attachment

	  CONDITION                        APH CALCULATION

CRP acreage which was previously      The approved APH yield for the existing 
a part of the insured's farming       unit will also apply to the CRP acreage.
operation and is now part of an 
existing unit:

Note:  This covers the majority       Note:  If acceptable yield history
of producers with CAT coverage        (for the same crop and county) has
whose unit structure is limited       been provided for the existing unit
to policy units.  For producers       it will also be used for the CRP
with buy-up policies, dividing        acreage.
policy units into separate units 
is optional.

CRP acreage which was previously      a    If the crop was not grown on
a part of the insured's farming            the unit prior to enrollment in
operation but is a separate unit:          CRP, *factored "T" Yield(s) are
					   used based on the greatest
					   number of years of records
					   provided for the crop on a
					   different (reference) unit:

					       Zero years, 65%
					       One year,  80%
					       Two years, 90%
					       Three or more years, 100%
					     
					   *Added land/practice/type/variety
					    procedures.
					    
				      b    The insured may provide 
					   acceptable production history 
					   for the years the crop was grown 
					   prior to enrollment in CRP and 
					   use standard APH yield 
					   calculation procedures.  
					   (Lack of production history 
					   for the years the land was 
					   in CRP is irrelevant.)
									       
				      c    If the crop was grown prior
					   to enrollment in CRP and 
					   acceptable prior production 
					   history is not provided,
					   factored "T" Yields are used 
					   based on the greatest number 
					   of years of records provided 
					   for the crop on a different
					   (reference) unit.  Refer 
					   to paragraph a above.

				      d    If the crop was grown for
					   ONLY one or two crop years 
					   prior to enrollment in CRP
					   and acceptable production
					   reports are provided, the 
					   production history and 
					   factored "T" Yield(s) are
					   used.  If a greater number 
					   of years of records have 
					   been provided for a
					   reference unit, "T" Yields 
					   are factored using the 
					   number of years of records
					   provided for the reference 
					   unit.

----------------------------------    --------------------------------------          

The entire farm was enrolled in       a    If the crop was NOT grown prior 
CRP (all cropland acreage):                to CRP, 100% of  the "T" Yield 
					   is used. (New Producer)
					      
				      b    If the crop was grown for ONLY
					   one or two crop years prior to 
					   enrollment in CRP, when 
					   acceptable production reports 
					   are provided, the production
					   history and 100% "T" Yields are 
					   used.(New Producer) 

				      c    If the crop was grown for more
					   than two crop years prior to 
					   enrollment in CRP and acceptable 
					   production reports are provided, 
					   standard APH yield calculation 
					   methods apply.   (Lack of
					   production history for the years 
					   the land was in CRP is 
					   irrelevant.)

				      d    If the crop was grown prior to
					   enrollment in CRP and acceptable
					   production reports are not provided,
					   a factored "T" yield determined 
					   by using 100% of the applicable 
					  "T" Yield is used.

----------------------------------    --------------------------------------          

Insured (not a new producer)          a    If added to an existing unit 
purchases, cash leases, or share           the existing unit's APH yield 
rents additional CRP land:                 may be used.  (Refer to added 
					   land procedures.)
				       
				      b    If not added to an existing unit 
					   or if added as a separate unit, 
					   a factored "T" Yield is used. 
					   "T" Yields are factored using
					   the greatest number of years of 
					   records provided for the crop
					   on a reference unit.  
										   (Added/L/P/T)
				      Note:  If share rented acreage, 
				      the production history for years the 
				      crop was grown prior to enrollment 
				      in CRP may be used if acceptable 
				      production reports are provided.

A "new producer" who has not produced the crop in the county will have an
approved APH yield based on 100 percent of the "T" Yield (110% in a Pilot 
New Producer County).