Thursday, January 22, 2009

Crop Insurance

Dave Paul at the Lewiston Crop Insurance Meeting--Bob Smathers photo

Nez Perce County Farm Bureau Hosts Crop Insurance Meeting
By Bob Smathers
Moscow--Dave Paul from the Risk Management Agency (RMA) in Spokane discussed crop insurance with growers in Lewiston on Monday, January 19. Mr. Paul covered the Federal Crop Insurance programs that growers have access to including Actual Production History (APH), Crop Revenue Coverage (CRC), Revenue Assurance (RA), Indexed Income Protection (IP), and Adjusted Gross Revenue-Lite (AGR-Lite).

“There are lots of options out there for growers and one option may be better than another in any given year” says Paul. Mr. Paul also gave an overview of the catastrophic coverage available to growers. Catastrophic coverage has been around since 1996, but not much wheat is covered under this option.

“There is also a new “Combo Product” tentatively scheduled to be filed for 2011 that combines the best features of CRC, IP, RA, and APH into one insurance program,” says Paul. He said this will be a big change in Federal crop insurance programs and should save agents and growers a lot of time and reduce confusion.

“A new policy for dry peas is available in 2009,” says Paul. Under this policy, chick peas will be insurable as dry peas, not dry beans – single policy will now insure all cool season pulses. Fall planted pulse acreage will be eligible under this new policy for coverage in the spring provided an adequate stand exists. Growers will also be allowed “optional units by dry pea type and separate coverage levels and price election percentage by dry pea type. Growers may also be eligible for replanting payments. A winter coverage endorsement will be available in select counties for 2010.

Mr. Paul also gave a summary of the Adjusted Gross Revenue-Lite coverage (AGR-Lite). This coverage is based on the tax year not production year and is based strictly on revenue. AGR-Lite insures against lost revenue from the sale of AG commodities produced during the insurance year due to unavoidable natural disasters and market fluctuations during the insurance year on a whole farm basis.

“This s a straight revenue program for the whole farm” says Paul. The grower can insure up to 80% of their actual adjusted gross revenue. On AGR policies, growers cannot finalize claims until after they have filed their taxes for the insurance year because the starting point for determining income and loss is the current year’s tax forms. Farmer paid premium rates vary considerably but generally fall between 2 and 4 % of total coverage depending on the commodities insured.

Dave Paul stresses that Federal Crop Insurance programs are legislated by the Federal Crop Insurance Act. “Premium subsidies and loss payments are paid from an insurance fund established under the Act. This includes full funding for any and all losses under the Federal crop insurance program” says Paul. Your crop insurance program is guaranteed – the Federal Crop Insurance Corporation (FCIC) is ultimately responsible for any amounts owed including claims which would be paid regardless of what happens with the insurance company.

Policies are sold and serviced by approved insurance companies under a Standard Reinsurance Agreement. Under the agreement, insurance companies are required to follow FCIC approved policy and procedure including timely payment of loss claims. Generally speaking, if an insured has complied with all the policy provisions, the insurance company will pay the loss within 30 days after agreement with the insured.

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