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).