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CROP INSURANCE

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.

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CROP INSURANCE

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  1. CROP INSURANCE PRESENTED BYCROP INSURANCE AGENTS OF AMERICA

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

  3. 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

  4. 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

  5. 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

  6. 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 • NAPNONINSURED ASSISTANCE PROGRAM • NOT ALL PLANS ARE AVAILABLE IN ALL AREAS\CROPS • THERE ARE OTHER PILOT PLANS NOT INCLUDED HERE

  7. 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%

  8. 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%

  9. CRC • CRC PROTECTS A PRODUCER’S 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

  10. 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

  11. 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 • FARM’S INDIVIDUAL YIELD PLAYS NO PART IN CLAIM PROCESS

  12. 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

  13. 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.

  14. 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

  15. 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 • Producer’s loss is greater than 50% • Loss production paid at 55% of market price • No administration fee

  16. 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)

  17. 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)

  18. 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

  19. 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

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