BULLETIN NO.:  MGR-97-020

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

FROM:     Kenneth D. Ackerman
          Administrator

SUBJECT:  Limited Resource Farmers


ISSUE:

Reinsured companies and their agents need to be aware of and take appropriate 
steps to assure that limited resource, minority,  and socially disadvantaged 
farmers are included in the USDA safety net provided by Federally
subsidized crop insurance.

BACKGROUND:

When the Federal Crop Insurance Reform Act of 1994 eliminated disaster 
assistance and the Federal Agricultural Improvement and Reform Act of 1996
eliminated many farm programs, Federally subsidized crop insurance became
the primary safety net for most American farmers. To assure that all
producers are able to afford at least the Catastrophic level of risk protection
(CAT), the CAT Endorsement and Section 4C(1) of the CAT Handbook provides 
procedure for waiving the administrative fee for limited resource farmers.
A limited resource farmer is a producer with an annual gross income of
$20,000 or less.  Producers must certify eligibility for this benefit.
The Certification Form can be found in Exhibit 24 of the CAT Handbook. 

As a private sector delivery partner of the USDA  safety net, reinsured 
companies and their agents share the responsibility to reach out to
limited resource, minority, and socially disadvantaged farmers. 
 
The Economic Research Service (ERS) has issued a report which provides 
information about limited resource and socially disadvantaged farmers.
The USDA definition of a socially disadvantaged group is one whose members
have been subjected to racial or ethnic prejudice because of their
identity as members of a group without regard to their individual qualities. 
Those groups include African Americans, American Indians or Alaskan natives, 
Hispanics, and Asians or Pacific Islanders.  ERS has added women to the
list of socially disadvantaged farm operators. This report may be ordered
by calling 1-800-999-6779.   Ask for Characteristics and Risks Management
Needs of Limited-Resource and Socially Disadvantaged Farmers (AIB-733). 
The cost is $12. 

ACTION:

1.   All insurance providers should remind their employees and agents of 
     limited resource farmer procedures and of their responsibility to
     reach out to limited resource and socially disadvantaged farmers.

2.   Insurance providers are encouraged to make their agents aware of the 
     availability and content of the ERS report mentioned above.