Industry Update

1. Industry Update 193 Mil Premiums & Participation Acres Insured 52 Mil

2. Plans of Insurance Choices • Canola CEO coverage • available wherever APH Canola is insurable • CEO will allow the insured to: • reduce the deductible thereby allowing greater coverage • CEO increases coverage at the same rate as the lower level MPCI coverage. • Premium Calculation • Base Premium = Total dollar amount of insurance (MPCI + CEO) X applicable MPCI rate. • Indemnity • Never due until the MPCI coverage level deductible is met. • Occurs if indemnity is payable under MPCI. • Payment will be proportional to MPCI indemnity.

3. Canola CEO coverage • Indemnity Example • MPCI indemnity = $40,000 • MPCI dollar amount of coverage = $120,000 • MPCI indemnity factor $40,000/$120,000 = .333 • Option coverage factor = 85% CEO level/50% MPCI level - 1 = .7 • Option dollar amount of insurance $120,000 X .7=$84,000 • The optional indemnity is .333 X $84,000 or $28,000. • The total indemnity (MPCI and CEO) is $40,000 + $28,000 = $68,000

4. Industry Update • New Buy - Up Premium Subsidies for 2001

5. Policy Updates/Provision Changes Forage Seeding • 2001 Spring Policy Changes • 2001 Forage Seeding • Settlement of Claim revision • Within the third step of the claim calculation • 10% of the planted acreage requirement has been deleted. • An example of a claim for indemnity was added for clarification.

6. Policy Updates/Provision Changes Canola • 2001 Filing Status • County expansion • Minnesota (13 counties) • North Dakota (3 counties) • Added two year rotation option • North Dakota • Minnesota

7. APH Adjustment Election • Insured’s may elect to substitute their actual APH yields with 60% of the county T-yield if their individual APH yields, in comparison, are lower. • Actual Yields include: • Assigned Yields • Temporary Yields

8. APH Adjustment Election • The APH 60% T-yield substitution may affect either a(n): • Additional Coverage Policy • CAT Policy • The APH election is available for the following plans of insurance: • MPCI APH • Crop Revenue Coverage • Income Protection • Revenue Assurance

9. APH Adjustment Election • The APH 60% T-yield substitution must be elected by the insured by the sales closing date for the respective crop. • Must be indicated on an application or change form that includes the insured’s signature. • Will be elected on a crop by county basis. • Will be a continuous election unless cancelled by the insured, in writing, by the cancellation date.

10. APH Adjustment Election • The insured’s premium may prove to be a significant factor in choosing available options in APH determination! $$$$

11. 2001 Added Land/P/T/V Definitions • Added Land - Cropland acreage: • Added to operation for current crop year • Not crop specific • Added P/T/V • First time anywhere in operation • By crop, by county • 50%/640 acre Limits

12. Important MPCI Dates • March 15, 2001 - Sales Closing Date. • Application/Changes in coverage and prices • Enterprise Units, Yield Adjustment & Yield Floor Options • May 1st, 2001 *- The Production Reporting Date (PRD) for Coarse Grains (Corn and Soybeans), Grain Sorghum, Sunflowers, Crambe, Mustard, Canola, Dry Beans, Dry Peas, Flax, Forage Seeding, Potatoes, Safflower, and Sugar Beets and Revenue Small Grains • May 30th, 2001 *- The Production Reporting Date (PRD) for Small Grains (Barley, Oats, Wheat) * Must request Added Land P/T/V by this date, unless it is added land acquired after the PRD then the deadline is the acreage reporting date • * Combining and Dividing Must be done by this date • June 30, 2001 - (Spring Crops) The date the insured is required to submit their acreage reports. • October 1, 2001(Spring Crops) - Premium Billing Date. The annual premium is earned and payable at the time the insurance period begins.

13. Late Planting 2001 small grains dry peas coarse grains green peas sunflower seed processing beans safflower processing sweet corn dry beans sugar beets potatoes hybrid sorghum and corn seed Late Pl.1% 1st - 25th day Canola, Mustard & Crambe Late Plant - 2% 1st - 5th day3% 6th - 15th day

14. Summary of Prevented Planting for 2001 • Guarantee on PP • 60% - Coarse Grains, Dry Peas, Dry Beans, Small Grains, Sunflowers, Canola, Mustard, Crambe & Safflower • 45% - Sugar Beets • 40% - Green Peas, Processing Beans, Processing Sweet Corn • 25% - Potatoes (Northern Policy) • Additional Levels of PP Coverage • Not available for CAT • 5% - from the base Guarantee listed above (ex. 60% to 65%) • 10% - from the base Guarantee listed above (ex. 60% to 70%) • Additional Premium to increase to this new PP level • You must report all acres on the acreage report, INCLUDING PP ACRES!!!

15. Summary of Prevented Planting for 2001 • Maximum Eligible PP Acres • Cannot exceed cropland acres in operation • Most acres in the APH database or reported for insurance • Last 4 calendar years • Exclude PP acres planted to substitute crop • May increase by ratio of added cropland acres • Proof of new land required by sales closing • Must be available in time to plant • No PP cause of loss evident

16. PP Not Provided for Acreage (Main Points) • Must be at least 20 acres or 20% of insurable acreage in unit, whichever is less • If both PP & planted acreage in field, assume same crop • Type or practice not planted at least 1 of last 4 years (example dry beans) • See Basic Provisions Section 17 for more… • Note - PP claims can now be paid independently of any production losses.

17. Prevented Planting • We will accept Intended acreage for only NEW FARMERS • New Farmers are for new counties only to establish PP Base Acres.

18. Wheat CRC Example Yld Loss Price Goes Up

19. Wheat CRC Example No Yld Loss Price Drops

20. Soybean CRC Example Yld Loss Price Goes Up

21. Soybean CRC Example No Yld Loss Price Drops

22. 1996 Malting Barley • Options A and B - Sales Closing • Must elect an option on or before final SCD Options A (1) and B (2) available • Only one Option applicable at a time

23. 1996 Malting Barley Option A: Coverage for production and quality at a greater price • Available for: • Producers of production contracted after the SCD; • Non-contracted production; or • A combination of contracted and non-contracted production

24. 1996 Malting Barley Option A - Sales Closing • Evidence of past malting barley production • Sale records of at least 4 crop years prior to the one immediately preceding the current crop year. • Sale records must show: • approved variety of Malting Barley • listed in the actuarial; • FCIC RSO approved via written agreement; • recommended by AMBA By practice • Due by the PRD • Sale records must clearly indicate sold production is malting variety • Failure to provide evidence: • Ineligible for coverage under this endorsement

25. 1996 Malting Barley Option A - Production Reporting • Unit structure: • One basic unit • By county • Without regard to: • share; • ownership; or • rental arrangement • Separate databases for feed and malting barley • Separate basic unit for feed and malting barley • One basic unit database for malting barley • Set up unit/database structure the first year endorsement is in force

26. 1996 Malting Barley Option A - Production Reporting • Reporting production • Feed barley database includes • Feed barley and • malting barley • Malting barley database includes • Malting barley • Insured must keep production separate

27. 1996 Malting Barley Option B: Coverage for production and quality at a greater price • Available for: • Producers of contracted production only

28. 1996 Malting Barley Option B - Production Reporting • Unit structure: • No separate database is required • NONE • Follow APH regulations • One basic unit for malting barley • Non-contracted production counts against malting barley guarantee