CROP INSURANCE

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CROP INSURANCE

• PRESENTED BY
  CROP INSURANCE AGENTS OF AMERICA

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Objective

• OVERVIEW OF CROP INSURANCE PLANS
• MATERIAL THAT CAN BE USED FOR PRESENTATION AND
  DISCUSSION AT THE LOCAL LEVEL

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CROP INSURANCE

• Crop Insurance is a Federal (USDA) program
  reinsured by the Federal Crop Insurance
  Corporation and delivered by Private Companies
  and their Local Agents.
• There are about 20 Private Companies approved and
  actively selling crop insurance. These companies
  share some of the risk and are reimbursed by the
  Federal Government for this delivery.
• USDA\RMA Regional service offices are in St
  Paul,MN for MN and Billings,MT for ND and SD

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CROPS INSURED FOR 1999

• Minnesota Barley, Dry Beans, Canola, Canning
  Beans, Corn, Flax, Forage Production, Forage
  Seeding, Green Peas, Grain Sorghum, Hybrid Corn
  Seed, Nursery, Oats, Popcorn, Potatoes,
  Soybeans, Sugar beeets, Sunflower, Sweet Corn,
  Wheat, Wild rice
• North Dakota Barley, Dry Beans, Canola, Crambe,
  Corn, Flax, Forage Production, Forage Seeding,
  Grain Sorghum, Millet, Mustard, Nursery, Oats,
  Potatoes, Rye, Safflower, Soybeans, Sugar beet,
  Sunflower, Spring Wheat, Durum Wheat
• South Dakota Barley , Dry Beans, Corn, Flax,
  Forage Production, Grain Sorghum, Hybrid Corn
  Seed, Millet, Nursery, Oats Popcorn, Rye,
  Safflower, Soybeans, Sunflower,Spring Wheat,
  Winter Wheat

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BASIC TERMS

• APH - ACTUAL PRODUCTION HISTORY - farmer
  reports production from each unit for up to 10
  years, data base-average is his yield.
• GUARANTEE - of yield OR of yield and price
  chosen for plan
• LEVEL - of yield chosen for plan
• PRICE ELECTION - of coverage chosen

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TYPES OF COVERAGE

• MPCI BASIC MULTIPLE PERIL CROP INSURANCE
• CRC CROP REVENUE COVERAGE
• IP INCOME PROTECTION
• GRP GROUP REVENUE COVERAGE
• RA REVENUE ASSURANCE
• CAT CATASTROPHIC COVERAGE
• NAP NONINSURED ASSISTANCE PROGRAM
• NOT ALL PLANS ARE AVAILABLE IN ALL AREAS\CROPS
• THERE ARE OTHER PILOT PLANS NOT INCLUDED HERE

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BASIC MPCI

• PROTECTS AGAINST PRODUCTION LOSSES
• APH - ANNUAL PRODUCTION REPORTS
• LEVELS - 50 TO 75 OF APH
• PRICE - ESTABLISHED BY RMA FOR
  THE YEAR - CHOOSE FROM 60 TO 100

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BASIC MPCI 2

• UNITS - BASIC OR OPTIONAL
• LOSS RESULTS WHEN HARVEST OF CROP DOES NOT MEET
  PRODUCTION GUARANTEE.
• THE HIGHER OF COVERAGE - THE GREATER THE
  PREMIUM
• GOVERNMENT SUBSIDY RANGES FROM 100 TO JUST OVER
  23

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CRC

• CRC PROTECTS A PRODUCERS REVENUE WHENEVER LOW
  PRICES, LOW YIELS, OR A COMBINATION OF BOTH
  CAUSES REVENUE TO FALL BELOW A GUARANTEED LEVEL
  SELECTED BY THE PRODUCER.
• APH - ANNUAL PRODUCTION REPORTS
• UNITS - BASIC, OPTIONAL, AND ENTERPRISE UNITS IN
  CERTAIN CIRCUMSTANCES.
• COVERAGE LEVELS FROM 50 TO 75 OF APH

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CRC 2

• BASE PRICE AND HARVEST PRICE
• 1. VARIES BY LOCATION AND CROP
• 2 . EITHER 95 OR 100 OF FUTURES
  CONTRACT PRICING
• 3. HARVEST PRICE - FLUCTUATIONS ARE LIMITED
  ABOVE OR BELOW THE BASE PRICE TO 1.50 FOR
  CORN, 3.00 FOR SOYBEANS, 2.00 FOR WHEAT,
  1.50 FOR SORGHUM AND .70 FOR COTTON

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GRP

• BASED ON COUNTY NASS YIELDS - NOT INDIVIDUAL
  PRODUCER YIELDS
• NO PRODUCTION RECORDS - LITTLE PAPER WORK
• SUBSIDIZED LIKE OTHER PLANS
• LEVELS ARE UP TO 90 OF COUNTY YIELD
• FARMS INDIVIDUAL YIELD PLAYS NO PART IN CLAIM
  PROCESS

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IP

• ONE UNIT PER FARM PER COUNTY
• APH RECORDS - UP TO 85 LEVEL IN SOME
  COUNTIES/CROPS - 75 FOR OTHERS
• AMOUNT OF PROTECTION - APH PRODUCTION X LEVEL
  X PROJECTED PRICE.
• PROJECTED PRICE SEPT. C B O T WHEAT FUTURES
  FOR THE MO. OF FEB.
• HARVEST PRICE SEPT. CBOT WHEAT FUTURES FOR
  AUG.
• CLAIM WHEN HARVEST PRICE X YIELD IS LESS THAN
  PROJECTED PRICE X APH X LEVEL

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RA

• APH (CORN SOYBEANS)
• REVENUE GUARANTEE
• BASIC, OPTIONAL, ENTERPRISE WHOLE FARM UNITS
• LEVEL IS UP TO 80
• A. FUTURES PRICE DURING FEB(CORN)X 90 X LEVEL
  X APHGAURANTEE
• B. HARVEST CBOT PRICE X YIELD
• CLAIM IF B. FALLS BELOW A.

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CAT

• BASED ON APH YIELD - ANNUAL PRODUCTION REPORT
• BASIC FARM UNITS BY SHARE
• GUARANTEE IS 50 OF APH
• 55 OF RMA PRICE ELECTION
• NO REPLANT PAYMENT
• PREMIUM ( ? )administrative fee - pending
  legislation for 1999

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NAP

• For crops and/or acreage that do not have an
  insurance plan
• Available at local FSA Offices
• Annual acreage and production reports
• Area\County average yield per crop is less than
  65 normal
• Producers loss is greater than 50
• Loss production paid at 55 of market price
• No administration fee

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PREVENTED PLANTING

• THIS COVERAGE IS INCLUDED IN MOST OF THE CROP
  INSURANCE PLANS.
• APPLIES WHEN A CROP CAN NOT BE PLANTED
• REPORTED ON THE ACREAGE REPORT WITH PLANTED
  ACRES
• CAN RAISE LEVELS 5 OR 10 FOR MORE COVERAGE (
  FOR ADDITIONAL PREMIUM)

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PREVENTED PLANTING 2

• MUST BE 20 ACRES OR 20 OF THE INSURABLE CROP
  ACREAGE IN THE UNIT.
• GUARANTEE
  1. 60 ON COURSE GRAINS, DRY
  BEANS, SMALL GRAINS, SUNFLOWERS, CANOLA
  SAFFLOWER
  2. 45 SUGAR BEETS
  3. 40 GREEN PEAS,
  PROCESSING BEANS, PROCESSING SWEET CORN
  4. 25 POTATOES (NORTHERN
  POLICY)

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PRODUCER RESPONSIBILITY

• APPLY TIMELY
• PROVIDE PRODUCTION RECORDS OR ACCEPT REDUCED T
  YIELD
• PAY ANNUAL FEE /PREMIUM
• REPORT ACREAGE PLANTED OR PREVENTED FROM PLANTING
• PROVIDE NOTICE OF LOSS TIMELY
• PROVIDE THE AMOUNT OF HARVESTED PRODUCTION AND
  CAUSE OF LOSS

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SUPPLEMENTAL COVERAGES

• SEVERAL COMPANIES OFFER ADDITIONAL SUPPLEMENTAL
  COVERAGE NOT COVERED SUCH AS
• CROP HAIL
• ADDING TO THE PRICE OPTION
• ADDITIONAL REPLANT
• COMBINED CROP COVERAGE
• THESE PRODUCTS ARE NOT SUBSIDIZED BY THE FEDERAL
  GOVERNMENT