CROP INSURANCE

PRESENTED BY

CROP INSURANCE AGENTS OF AMERICA

Objective
OVERVIEW

OF CROP INSURANCE

PLANS MATERIAL THAT CAN BE USED FOR PRESENTATION AND DISCUSSION AT THE LOCAL LEVEL

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

CROPS INSURED FOR 1999

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

Minnesota: Barley, Dry Beans, Canola, Canning

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

BASIC TERMS
APH

- ACTUAL PRODUCTION HISTORY - farmer reports production from each unit for up to 10 years, data baseaverage 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

TYPES OF COVERAGE
MPCI
CRC IP GRP RA
BASIC MULTIPLE PERIL CROP INSURANCE
CROP REVENUE COVERAGE INCOME PROTECTION GROUP REVENUE COVERAGE REVENUE ASSURANCE

CAT
NAP

CATASTROPHIC COVERAGE
NONINSURED ASSISTANCE PROGRAM

NOT ALL PLANS ARE AVAILABLE IN ALL AREAS\CROPS THERE ARE OTHER PILOT PLANS NOT INCLUDED HERE

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%

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%

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

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

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

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

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 APH=GAURANTEE B. HARVEST CBOT PRICE X YIELD CLAIM IF B. FALLS BELOW A.

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

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

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)

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)

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

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