USDA TO SUSPEND PILOT WATERMELON CROP INSURANCE PROGRAM

Contact: Eric Edgington (202) 690-2539
Eric.Edgington@rma.usda.gov

WASHINGTON, Sep 13, 1999 - Risk Management Agency Administrator Ken Ackerman today announced the coming suspension of the pilot watermelon crop insurance program effective for the 2000 crop year. All current insurance policies are still in force until the end of the insurance period indicated in the producers" insurance contracts. After that, the policies will be canceled for the 2000 crop year in accordance with the policy terms.

"Pilot programs by their very nature are experimental," said Ackerman. "Based on the feedback we have received, we need to retool the program into a more market-neutral product."

The notice to solicit public comment will be published in today's Federal Register.

The watermelon program was approved by the Federal Crop Insurance Corporation (FCIC) Board of Directors in August 1998 for the 1999 through 2001 crop years in 15 counties in 7 states. The pilot was developed to explore the feasibility of providing insurance protection on a crop that was previously covered by the noninsured assistance program (NAP) or ad hoc disaster payments.

Nationwide, watermelon production has increased. To ensure that crop insurance does not unduly stimulate production in pilot counties, the policy will be re-evaluated. After evaluation of the data gathered from the present program, FCIC will make a decision on whether to continue with an insurance policy.