Policy Updates/Provision Changes

1. Policy Updates/Provision Changes

2. Policy Updates/Provision Changes • What Crop Provisions have changed for the 2001 Crop Reinsurance Year? • What forms have changed for CRC coverage? • Has Revenue Assurance dramatically expanded its pilot program?

3. Policy Updates/Provision Changes New Provisions • 2001 Basic Provisions • Basic Provisions revised (700B-2001) • CAT Endorsement revised (777-2001) • Due to other mandated legislative changes taking place, future revisions are forthcoming to the: • Basic Provisions • CAT Endorsement • Further changes may be implemented in the 2002 Crop Reinsurance Year.

4. Policy Updates/Provision Changes New Provisions • 2001 Basic Provisions • GRP Basic Provisions • Administrative Fee Subsidy Changes • “Buy up” distinction between Limited and Additional Coverage has been eliminated. • All “buy up” coverage is now considered AdditionalCoverage. • The Additional Coverage Administration Fee is $30. • All coverages in excess of CAT coverage. • Limited resource farmers may waive the Additional Coverage Fee.

5. Policy Updates/Provision Changes New Provisions • 2001 CAT Endorsement • GRP CAT Endorsement • CAT fee is revised from $60 to $100 per crop/county. • Outdated references to “limited” coverage are deleted. • Limited resource farmers may waive the Additional Coverage Fee.

6. Policy Updates/Provision Changes Forage Seeding • 2001 Spring Policy Changes • 2001 Forage Seeding • Language has been changed to offer coverage for forage regardless of its intended use. • Livestock feed definition dropped • The definition of “harvest” was clarified. • Acreage that is only grazed by animals will not be considered a harvest process. • South Dakota may now offer forage seeding coverage. • South Dakota - March 15th Cancellation Date

7. Policy Updates/Provision Changes Forage Seeding • 2001 Spring Policy Changes • 2001 Forage Seeding • Section 6 changes “Report of Acreage” • The special provisions will require the submittal of all insured acreage of forage seeding before the acreage reporting date. • Forage acreage may need to be submitted separately from other crop acreage reporting. • Section 8 changes “Insurable Acreage” • In five counties in California and all other states, if less than 75% of the normal stand is achieved, replanting the damaged acreage is required.

8. Policy Updates/Provision Changes Forage Seeding • 2001 Spring Policy Changes • 2001 Forage Seeding • Replanting Payment Calculation and Definition Change. • The amount of the replanting payment will be equal to 50 percent of the amount of indemnity as opposed to liability. • Special provisions may override provision language.

9. 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.

10. Policy Updates/Provision Changes Northern Potato Certified Seed Endorsement • 2001 Crop Policy Changes • The per-acre guarantee is clarified as the same per-acre guarantee under the N. Potato Provisions. • Claim computation was revised • Revised the claim computation so that an indemnity can be paid when seed production meets the standards of the state in which it is grown, but the actual amount of production is lower than the production guarantee.

11. Policy Updates/Provision Changes Northern Potato Certified Seed Endorsement • 2001 Crop Policy Changes • Added language specifying that the endorsement does not extend the insurance period. • Damage discovered during winter growing tests is still covered. • Damage must have occurred within the insurance period. • Unit structure as provided in the Basic Provisions and Crop Provisions will apply.

12. Policy Updates/Provision Changes Error! • 2001 Filing Status • Coverage Endorsement Option appears on the FCI-35 in error for: • RA Canola- North Dakota • CRC Rice - Arkansas, Louisiana, Mississippi • Corrected documents will not be issued.

13. Policy Updates/Provision Changes Higher Coverage Levels • 2001 Filing Status • Coverage Level expansions will exist for the following crops on a county basis: • Wheat • Corn • Barley • Soybeans • Hybrid Corn Seed • Grain Sorghum

14. 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

15. Policy Updates/Provision Changes • Revenue Plan Updates

16. Policy Updates/Provision Changes • Spring 2001 Revenue Policies • BASIC PROVISION CHANGES • Administrative Fees for “Additional” Coverages • All coverage levels 50%, 55%, 60%, 65%, 70%, 75%, 80%, 85% • Please see actuarials for 80% and 85% coverage availability. • $30 per Crop/County • No Limits CRC IP RA

17. Policy Updates/Provision Changes • Spring 2001 Revenue Policies • New Higher Premium Subsidies • Quote traditional APH business premium using new higher Revenue Product Subsidies. • Revenue Product Subsides match the higher APH Subsidies. • New Yield Substitution Procedures • New Added Land Procedures CRC IP RA

18. Policy Updates/Provision Changes • 2001 CRC Policy Provisions • What’s new? • CRC Basic Provisions • 2001- NCIS 700B-CRC • CRC Wheat Crop Provisions • 2001-NCIS 714W-CRC • Commodity Exchange Endorsement - Wheat • 2000-NCIS 714WWE-CRC • Special Provisions • CRC County Actuarial Document CRC

19. Policy Updates/Provision Changes • 2001 CRC Policy Provisions • What’s new? • CRC Wheat Underwriting Rules • Edition 6-26-00 • CRC Questions and Answers • Edition 5-18-00 • Premium Calculation Worksheet • Edition 6-26-00 CRC

20. Policy Updates/Provision Changes • 2001 CRC Policy Provisions • CHANGES • Discontinuance of CRC durum coverage: • California • Arizona • 100% is now the only price election option available • 95% price election totally eliminated • Date Changes for Wheat Crop Provisions • Contract dates in several counties • Termination dates in several counties CRC

21. Policy Updates/Provision Changes CRC • 2001 CRC Policy Provisions • CHANGES • The Continuous Rating method has been implemented for CRC rating. • No effect on calculation of guarantee. • No effect on calculation of premium.

22. Policy Updates/Provision Changes CRC • 2001 CRC Policy Provisions • BASIC PROVISION CHANGES • Cancellation and Termination Dates were revised to reflect statements already found within the specific special provisions. • Section 11 Settlement of Claim was revised to include specific language regarding damage. • Heat damaged kernels are not considered “damaged.” • Foreign materials present will not be considered “defects.” • Deficiencies include musty, sour, or commercially objectionable foreign odor. • Smut is not considered a deficiency.

23. Policy Updates/Provision Changes CRC • 2001 CRC Policy Provisions • Added North Dakota Counties in which CRC durum coverage is available. • Those counties include: Benson, Bottineau, Burke, Cavalier, Divide, McLean, Mountrail, Nelson, Pierce, Ramsey, Renville, Rollette, Towner, Ward, and Williams.

24. Policy Updates/Provision Changes • Income Protection Protection • The program areas for IP have not expanded. • 85% Coverage Level is now available for selected crops in selected counties in the following states. • South Dakota (Wheat) All counties except Washabaugh IP

25. Policy Updates/Provision Changes • Income Protection • CAT Coverage is available. • CAT Coverage Fees Revised from $60.00 to $100.00. IP

26. Policy Updates/Provision Changes RA • REVENUE ASSURANCE (RA) • Significant Program Expansion

27. Policy Updates/Provision Changes 2001 RA Availability RA Corn, Soybean, & Wheat Coverage Corn & Soybean Coverage Barley, Canola, & Wheat Coverage Barley, Canola, Corn, Soybeans, Sunflowers, & Wheat

28. Policy Updates/Provision Changes RA • Revenue Assurance Program by Crop • Barley (feed), Canola/Rapeseed • Idaho & North Dakota • Corn, Soybeans • Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Ohio, Oklahoma, South Dakota & Tennessee • Sunflowers • North Dakota • Wheat • Arkansas, Colorado, Idaho, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, North Dakota, Ohio, Oklahoma, South Dakota & Tennessee

29. Policy Updates/Provision Changes • Revenue Assurance Wheat Policy Provisions • RA Basic Provisions • (2001-NCIS 700B-RA) • RA Wheat Crop Provisions • (2001-NCIS 714W-RA) • RA Winter Wheat Coverage Endorsement • (2001-NCIS 714WWE-RA) • RA Disclosure Statement • (2001-NCIS 700B-RAD) • Special Provisions • RA County Actuarial Documents RA NEW!

30. Policy Updates/Provision Changes RA • Revenue Assurance (RA) • Changes have been made to the RA program for the 2001 crop year. • Most of these changes deal with either: • The inclusion of Winter Wheat as an insurable crop, or • The implementation of the Agricultural Risk Protection Act. (ARPA)

31. Policy Updates/Provision Changes RA • Revenue Assurance (RA) • Revenue Assurance Wheat Provisions now include all spring and winter wheat in an eligible county for RA that: • The insured has a share. • Is adapted to, and compatible with the area. • Is planted for harvest as grain, and • Is NOT: • Interplanted with another crop. • Planted as an established grass or legume; or • Planted as a nurse crop, unless for new forage seeding, if seeded at normal rate.

32. Policy Updates/Provision Changes RA • Revenue Assurance Units • Revenue Assurance allows the following types of unit structures: • Basic • Optional • Enterprise • Whole Farm

33. Policy Updates/Provision Changes RA • Revenue Assurance Units • In addition to “regular” optional units, counties having both a winter and spring type final planting date can establish optional units only if the unit contains either: • Initially planted winter wheat; or • Initially planted spring wheat.

34. Policy Updates/Provision Changes RA • Revenue Assurance Units • An enterprise unit may be established for both spring and winter wheat, if qualifications are met. • Winter wheat can NOT be insured under the whole farm unit. • Acceptable unit structures are: • Basic • Optional • Enterprise • If a whole farm unit is chosen on spring wheat and other crops, the insured may NOT include winter wheat within that unit.

35. Policy Updates/Provision Changes RA • Revenue Assurance Coverage Level • All spring and winter wheat must be insured at the same coverage level. • If the insured has a basic or optional unit for winter wheat and the insured elects a whole-farm unit on spring crops that includes spring wheat, • The coverage for the whole farm unit is limited to the coverage level elected for basic and optional units.

36. Policy Updates/Provision Changes RA • Revenue Assurance Coverage Level • If the insured has a basic or optional unit for winter wheat and the insured elects a whole-farm unit on spring crops that does not include spring wheat, • The coverage for the whole farm unit may be elected from the listing of available coverages at the insured’s discretion.

37. Policy Updates/Provision Changes RA • Revenue Assurance Coverage Level • Let’s look at an example: • If the insured elects: • A basic unit for winter wheat at the 70% coverage level, and a whole farm unit for spring crops that include wheat then: • The spring crop whole farm unit is limited to the 70% coverage level elected for the winter wheat basic unit.

38. Policy Updates/Provision Changes RA • Revenue Assurance Coverage Level • Let’s look at the opposite example: • If the insured elects: • An optional unit for winter wheat at the 65% coverage level, and a whole farm unit for spring crops that does not include wheat then: • The spring crop whole farm unit is not limited to the 65% coverage level elected for the winter wheat basic unit. • The insured may elect the 85% coverage level if it is available.

39. Policy Updates/Provision Changes RA • Revenue Assurance Projected Harvest Price • The simple average of the final daily settlement prices from August 15th to September 14th for the following year Kansas City Board of Trade July hard red winter wheat futures contract. • Arkansas, Colorado, Iowa, Kansas, Missouri, Oklahoma, and South Dakota • Released on or before September 20th of the current crop year.

40. Policy Updates/Provision Changes RA • Revenue Assurance Fall Harvest Price • The simple average of the final daily settlement prices from July 1st to July 14th for the Kansas City Board of Trade July hard red winter wheat futures contract. • Arkansas, Colorado, Iowa, Kansas, Missouri, Oklahoma, and South Dakota • Released on or before August 5th of the current crop year.

41. Policy Updates/Provision Changes RA • Revenue Assurance Written Agreements • Written agreements are allowed only: • For a rate or a factor of a rate. • Only if the crop is insurable in that county under the MPCI APH plan. • If the crop is insurable in the county under the MPCI APH coverage, but a portion of the county where the crop will be grown is designated as uninsurable or unclassified. • FCI-33 crop insurance map determines whether the land is uninsurable or unclassified.

42. Policy Updates/Provision Changes RA • Revenue Assurance Basic Provisions • Updates and Changes • “Expected per-acre revenue” has been clarified that a weighted average is used for enterprise and whole farm units. • “Per-acre revenue guarantee” has been clarified that the per acre revenue guarantee for an enterprise unit is a weighted average and will be the same for the insured acres of the crop in the county. • The “per-acre revenue guarantee” for a whole farm unit is a weighted average and will be the same for all insured acres in the county.

43. Policy Updates/Provision Changes RA • Revenue Assurance Subsidy Update • The updated subsidy information will coincide with the Agriculture Risk Protection Act. • The premium subsidy amount will depend on the coverage level percent. • The coverage level percent is determined by dividing the per-acre revenue guarantee by the expected per acre revenue, rounded to the hundredths for enterprise or whole-farm units.

44. Policy Updates/Provision Changes RA • Revenue Assurance Subsidy Update • If the Coverage Level Percent is: • Greater than or equal to .65 but less than .75 • Then the Premium Subsidy Factor is .59 • Greater than or equal to .75 but less than .80 • Then the Premium Subsidy Factor is .55 • Greater than or equal to .80 but less than .85 • Then the Premium Subsidy Factor is .48 • Greater than or equal to .85 • Then the Premium Subsidy Factory is .38

45. Policy Updates/Provision Changes RA • Revenue Assurance Definitions • 2001 Wheat Crop Provisions • Updates and Changes • Changes have been made to the RA Wheat Crop Provisions for the 2001 Crop Year to coincide with the MPCI Small Grains Crop Provisions. • Definitions were added for clarification for the new insurability of fall planted crops.

46. Policy Updates/Provision Changes RA • Revenue Assurance Definitions • 2001 Wheat Crop Provisions • Updates and Changes • Additions to definitions include: • A section added to indicate that the insured crop must be adapted to the area and must be compatible with agronomic and weather conditions in the area. • A section added to indicate that any acreage the insured anticipates destroying may be reported as uninsurable or may be reported as insurable and then short rated, where the short rate is provided. • A section was added to make the Winter Coverage Endorsement available for some counties.

47. Policy Updates/Provision Changes RA • Revenue Assurance Definitions • 2001 Wheat Crop Provisions • Updates and Changes • Addition and Revisions to Definitions were added to clarify that: • Heat damaged kernels are not considered “damaged.” • Foreign materials present will not be considered “defects.” • Deficiencies include musty, sour, or commercially objectionable foreign odor. • Smut is not considered a deficiency. • Late Planting was added to coincide with the Small Grains Crop Provisions and to differentiate between spring and winter wheat.

48. Policy Updates/Provision Changes RA • Revenue Assurance UPDATES • 2001 RA Disclosure Statement • The Disclosure Statement for RA has been updated for the 2001 crop year. • The “coverage level” was added as a factor when figuring the “final per-acre revenue guarantee.

49. Policy Updates/Provision Changes RA • Revenue Assurance UPDATES • 2001 RA Disclosure Statement • Most of the changes were made to allow for a distinction between fall and spring wheat. • Projected harvest prices released on or before March 5th for spring planted crops and September 20th for winter wheat. • Fall harvest prices will be released on August 5th for winter wheat, September 5th for spring wheat, October 5th for canola/rapeseed and sunflowers, November 5th for soybeans, and December 5th for corn.

50. Policy Updates/Provision Changes RA • Revenue Assurance UPDATES • 2001 RA Disclosure Statement • Most of the changes were made to allow for a distinction between fall and spring wheat. • Premium Due Date • October 1st for spring crops • July 1st for winter crops • Fall planted wheat cannot be included under whole farm units. • We can use a whole farm unit for spring crops and a basic, optional, or enterprise unit for fall planted wheat.