Q: What is the Actual Production History (APH) Yield Exclusion (YE)?
A: The APH YE is a provision of the 2014 Farm Bill that allows for the exclusion of an actual yield for a crop year when RMA determines the county per planted acre yield for a crop year was at least 50 percent below the simple average of the per planted acre yield for the crop in the county for the previous 10 consecutive crop years. When a crop year is determined to be eligible for YE for a crop in a county, producers in contiguous counties will also be eligible to exclude their actual yield for that crop year under YE. Separate determinations will be made for irrigated and non-irrigated acreage, when data is available. The YE option will be listed in the county actuarial documents showing the crop and eligible crop year(s) for exclusion.
Q: How can YE help me?
A: YE allows a producer to exclude an actual yield(s) from an eligible crop year for the county (such as a year in which a natural disaster or other extreme weather event occurs) from their production history when calculating approved APH yields used to establish their crop insurance coverage. The level of insurance coverage available to a producer is based on the producer’s average yields over the four to ten most recent crop years and excluding lower yielding eligible crop years can increase the producer’s approved APH yield.
Q: How do I get this benefit?
A: To get this benefit, you must elect the YE option on a crop insurance application or policy change form by the sales closing date. Consult with your crop insurance agent to make this election.
Q: What is a beginning farmer or rancher?
A: A beginning farmer or rancher is an individual who has not actively operated and managed a farm or ranch with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 5 years. This includes an insurable interest as an individual or as a substantial beneficial interest holder (10 percent or more) in another person who has an insurable interest in any crop or livestock. Crop years when the beginning farmer/rancher was under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years) or on active duty in the U.S. military may be excluded from consideration of the 5 crop years.
Q: What are the benefits of being a beginning farmer or rancher?
A:
- Exemption from paying the administrative fee for catastrophic (CAT) and additional coverage (buy up) level policies;
- Additional 10 percentage points of premium subsidy for additional coverage policies (buy-up) that have premium subsidy;
- Use of the production history of farming operations where beginning farmers and ranchers were previously involved in the decision making or physical activities; and
- An increase in the substituted yield for yield adjustment, which allows a replacement of a low yield due to an insured cause of loss, from 60 to 80 percent of the applicable transitional yield (T-Yield) for the crop in the county.
Q: Do I really need crop insurance?
A: Buying a crop insurance policy is one risk management option. Producers should always carefully consider how a policy will work in conjunction with their other risk management strategies to insure the best possible outcome each crop year. Crop insurance agents and other agri-business specialists in the private and public sectors can assist farmers in developing a good management plan.
Q: How does the Federal crop insurance program work, and how do I apply for coverage?
A: Federal Crop Insurance Corporation (FCIC) programs are administered by the Risk Management Agency (RMA), which underwrites crop insurance policies for hundreds of crops and livestock in the United States. Crop insurance policies are sold and serviced by private insurance companies.
For information about insurance products available in your area, please contact a local insurance agent or one of the insurance companies that sell and service crop insurance policies in your state. RMA also has 10Regional Offices, in various locations across the country, that you may contact for information specific to your area. Your local insurance agent can describe the different insurance products available, and the policy rates and terms. Your agent will help you choose the best coverage for your crop based on your particular farm operation and your risk management and budgetary needs.
Q: Federal crop insurance isn't available for my crop in my county, but it's available in other nearby counties. Why can't I get Federal crop insurance for my crop?
A: Congress requires that RMA strive for actuarial soundness in all Federal crop insurance programs that it administers. In support of this goal, RMA has a very deliberate process for new program development. New pilot programs must be approved by the FCIC Board of Directors before they are made available to producers. Under certain circumstances, new pilot programs must be authorized by Congress before RMA can begin program development.
Most pilot programs are expected to operate for about 3 years so that RMA may gain insurance experience and test the program components before the pilot programs are made more broadly available or are converted to permanent programs.
However, RMA is authorized, under certain circumstances on a case-by-case basis, to underwrite Multiple Peril Crop Insurance (MPCI) insurance offers when standard rates or coverage is not available. RMA can enter into a Written Agreement with the insurance provider and can underwrite an individual policy if the grower's particular crop production plan will be actuarially sound under modified rates and terms.
If you are interested in expansion of the Federal crop insurance program to your area and your crop, you should contact the Regional Office that serves your area. RMA staff will ensure that your request is given full consideration.
If the Federal crop insurance program cannot be made available in your county for your crop, RMA will advise you if an individual Written Agreement is possible or if coverage is available through the private sector.
Q: What is the Livestock Gross Margin for Cattle insurance policy?
A: The Livestock Gross Margin for Cattle (LGM for Cattle) insurance policy provides protection against the loss of gross margin (market value of livestock minus feeder cattle and feed costs) on cattle. The indemnity at the end of the 11-month insurance period is the difference, if positive, between the gross margin guarantee and the actual gross margin. The LGM for Cattle insurance policy uses futures prices to determine the expected gross margin and the actual gross margin. Adjustments to futures prices are state- and month-specific basis levels. The price the producer receives at the local market is not used in these calculations.
Q: Who is eligible for the LGM for Cattle insurance policy?
A: Any producer who owns cattle in the states of Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming is eligible for LGM for Cattle insurance coverage.
Q: What cattle are eligible for coverage under the LGM for Cattle insurance policy?
A: Only cattle sold for commercial or private slaughter primarily intended for human consumption and fed in Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming are eligible for coverage under the LGM for Cattle insurance policy.
Q: What is the Pasture, Rangeland, and Forage Insurance Policy?
A: The PRF policy is an area-based insurance plan that covers perennial pasture, rangeland, or forage used to feed livestock.
Q: What does “area-based” mean?
A: “Area-based” means payments are not based on an individual rancher’s experience; rather, payments are based on a grid’s deviation from normal experience. For example, under the Rainfall Index, if your ranch received a surplus of rain, but the area in your grid was below average, you could receive a payment or vice versa.
Q: How does the Rainfall Index work?
A: Producers must choose at least two, 2-month periods when precipitation is important to their operation. These periods are called index intervals. Losses are calculated based on whether the current year’s precipitation in a grid has deviated from normal compared to the historical normal precipitation in the same grid, for the same period. RMA uses NOAA CPC data to calculate normal precipitation and deviations from normal precipitation. Losses are not based on a single ranch or a specific weather station in a general area. RMA uses NOAA precipitation data based on the Optimal Interpolation methodology. Interpolation is based on the idea that things closer together in space are generally more similar than those farther apart and it estimates precipitation for a grid using reporting stations within a search radius around the grid. More information about the technology and how NOAA CPC interpolates weather data to a specific grid can be found on RMA’s PRF web page. Select “Rainfall Index, Pasture, Rangeland, Forage Technology”. It is important to understand that precipitation is interpolated to the grid, not measured within the grid.
Q: What is a grid? Why is it important?
A: A grid is the physical area under which your operation is insured. You are paid based on the losses interpolated to the grid for the Rainfall Index, which is why it is important that you choose the right grid(s) in which your operation is located. If you have any questions about your grid(s) identification number, or for more information on how grids are measured please contact your crop insurance agent.
Q. What are the requirements for electing separate coverage levels for irrigated and non-irrigated practices?
A: Your actuarial documents must provide for separate coverage for an irrigated and non-irrigated practice. If so, you may select one coverage level for all irrigated acreage and one coverage level for all non-irrigated acreage. For example, you may choose a 65 percent coverage level for all irrigated acreage (corn irrigated practice) and an 80 percent coverage level for all non-irrigated acreage (corn non-irrigated practice).
If your Crop Provisions allow the option to separately insure individual crop types or varieties, and your actuarial documents provide for separate coverage by irrigated and non-irrigated practice, you may select coverage levels by irrigated and non-irrigated practice for each separate crop type or variety.
Q. Will I pay more than one administrative fee for insurance?
A: This election does not change the administrative fee owed under the policy. If you owed one administrative fee for the crop, you will still owe one administrative fee if you elect separate coverage levels by practice.
Q. Can I still elect separate coverage levels by practice on my additional coverage policy if I excluded my high-risk land from my additional coverage policy, and insured the high risk land under CAT Endorsement?
A: Yes, you may still elect separate coverage levels on your additional coverage policy only. This option is not available for the high risk land insured under the CAT Endorsement.
Q. Can I elect separate coverage levels by practice on my high-risk land if I elect to insure my high-risk land under the High-Risk Alternative Coverage Endorsement?
A: Yes, under the High-Risk Alternate Coverage Endorsement you may insure your high-risk land at different coverage levels for irrigated and non-irrigated acreage not to exceed the coverage level on your additional coverage policy for your non-high risk land, if you elected coverage levels by practice on your additional coverage policy.
Q. Am I allowed to have an enterprise unit for my irrigated acreage and basic or optional units on my non-irrigated acreage (or vice versa)?
A: No, you may only elect to have separate enterprise units (EU) for both your irrigated and non-irrigated acreage and each must independently qualify as an enterprise unit. You may not elect to have an enterprise unit for one practice and a different unit structure for the other practice.
Q. What are the requirements for Enterprise Units?
A: You must have at least two sections, section equivalents, FSA farm numbers, or units established by written unit agreement or unit division option whichever are the basis for optional units where the insured acreage is located or are applicable to the insured acreage. You may combine two or more sections, section equivalents, or FSA farm numbers, if more than one of these are the basis for optional units where the insured acreage is located or are applicable to the insured acreage (for example, a portion of the acreage is located in an area where sections are the basis for optional units and another portion of the acreage is located in an area where FSA farm numbers are the basis for optional units). You may also have one section, section equivalent, or FSA farm number qualify for an enterprise unit, based on whichever type of parcel is the basis for optional units where the insured acreage is located, provided there are at least 660 planted acres of the insured crop in such section, section equivalent, or FSA farm number.
In addition, at least two of the sections, section equivalents, FSA farm numbers, or units established by written unit agreement or unit division option, whichever are the basis for optional units where the insured acreage is located or are applicable to the insured acreage, must each have planted acreage that constitutes at least the lesser of 20 acres or 20 percent of the insured crop acreage in the enterprise unit. These parcels can be aggregated to form at least two parcels to meet this requirement.
These requirements for enterprise units must be met for each of the irrigated and non-irrigated acreage for you to qualify for separate enterprise units by practice.
Q. If I do not qualify for separate enterprise units on irrigated and non-irrigated acres, can I still have one enterprise unit?
A: Yes, as long as you meet the qualifications for an enterprise unit containing all insurable acreage of crop.
