Transcript Selling an Idea or a Product

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
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

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
BASIC TERMS
 APH
- ACTUAL PRODUCTION
HISTORY - farmer reports production from
each unit for up to 10 years, data baseaverage 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
TYPES OF COVERAGE
 MPCI
BASIC MULTIPLE PERIL CROP INSURANCE
 CRC
CROP REVENUE COVERAGE
 IP
INCOME PROTECTION
 GRP
GROUP REVENUE COVERAGE
 RA
REVENUE ASSURANCE
 CAT
 NAP


CATASTROPHIC COVERAGE
NONINSURED ASSISTANCE PROGRAM
NOT ALL PLANS ARE AVAILABLE IN ALL AREAS\CROPS
THERE ARE OTHER PILOT PLANS NOT INCLUDED HERE
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%
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%
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
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

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
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
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.

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
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

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)

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)

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

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
