Transcript Risk Management Agency Spokane Regional Office Spring 2010

Risk Management Agency
Spokane Regional Office
Spring 2010
General update on the Federal crop insurance
program in the State of Washington:

Insurable Crops in Washington

Federal Crop Insurance Participation

General Program Update

2010 Changes

Cherries – New ARH Program

2011 – New Common Crop Policy
◦ Partnership Agreements
Federal Crop Insurance Private Sector Delivery System
RMA/FCIC
8 writing in WA
SRA
16 Private Insurance
Companies
Insurance Agents
(25,000+)
FCIC
Approved
Insurance
Policy
Loss Adjusters
(5,000+)
Agricultural Producers
Premium
Subsidy
(1.1 Million Policies)
264 M Acres
$79.95B in Coverage


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Apples, Barley, Blueberry, Cabbage, Canola, ARH
Cherry Pilot, Corn, Cranberries, Dry Beans, Dry Peas,
Flax, Forage Production, Forage (Alfalfa) Seed Pilot,
Grapes, Table Grapes, Green Peas, Mint, Mustard,
Nursery, Oats, Onions, Pears, Potatoes, Processing
Beans, Processing Sweet Corn, Safflower, Stonefruit,
Sugar Beets, and Wheat
Adjusted Gross Revenue Pilot (AGR)
Adjusted Gross Revenue-Lite (AGR-Lite)
Pasture, Rangeland & Forage (PRF) Pilot
Livestock Risk Protection – Cattle, Swine, Lamb
Apiculture (API) Pilot
Livestock Gross Margin Dairy Cattle
Note: Program availability varies by county and subject to change
2010 Crop Insured By-State/County
Post on RMA Spokane RO Internet Page
http://www.rma.usda.gov/aboutrma/fields/wa_rso/
ALASKA 2010
A
P
P
L
E
B
A
R
L
E
Y
IDAHO 2010
C F
A O
B R
B A
A G
A A B
G E
L P A
FE P R
A
L
F
A
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N
U
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C
R
A
Y
N
C
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R
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A
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OREGON 2010
013 Aleutians East
X
016 Aleutians West
001
Ada
X
020 Anchorage
003
Adams
X
X
005
Bannock
X
X
007
Bear Lake
X
009
Benewah
X
X
011
Bingham
001 Baker
X
X
013
Blaine
003 Benton
X
X
050 Bethel
005 Clackamas
O
A
T
S
P
O
T
A
T
D
O
R
E
Y
S
B
E
A
N
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W
H
E
A
T
F
L
A
X
P
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A
P
R
I
C
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T
N
E
C
T
A
R
I
N
EC
H
E
R
R
Y
A A B B C C
L P A L A A
F P R U B N
A L L E B O
X
L XE E B A L
F
Y E G A
A
R E
XWASHINGTON
X R
Y
X
X
X
XX
X X
X
X X X
P
E
A
C
H
E
S
G G M M N O O P P C S S S W
R R I U U A N R O A A U W H
A E N S R T I F T N F G E E
P E T T S S O
A
F A E A
E N
A E
N
T B L R T T
R R
O E O
P
D Y
E A W B C
E
S N E E O
C C A
B D F A N P G G MS MR N E O RO P P P CS B S W
O R SE R O P E E R R I U U T A NN R E O AU E W H
R A A Y R R C A A E N S R S T I F A T NG E E E
N N N
A I T C P E T T S S O
R A A T E A
X BX S X P G X C XA H E XN
X
A E
NX
S T BR S T T
E E X O XR E
E
R
R
O E
X
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A A B T B I C S C CP C CD BY D A N P GE GA M MC N O
R
A
2010R
X X X
X X
X
X
L S P A L N A A HE O R E R P E E RS RN I UO U A
Y
X U
XE B NX E A R A A Y R XC A A ES N SR R T
F P R
S
A X
L L
I X T C P E T TN S S
X E
X B O R N N N
L E E B A L R
B S P C A H E N
A E
X
X X X
X X
X X X
X
F
Y E G A Y
E X E O X
R E X
R X
R
X A
X R
X E X X X R XXX
A T XI S
P
D X
Y
X
X
X
R
Y
X
007 Clatsop
001 Adams
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003 Asotin
S
R X X
Y
X
X
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X
X
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N
E
X X
X
E
A
S
X X
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O
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O
N
X X
X X X
X X X
005 Benton
X
X
X X X X
X X X X X X
X
007 Chelan
X
X
X
X X X X
X
009 Clallam
X
X
X
011 Clark
X X
X
X
X
PNW Total Crop Insurance Participation
2009 Losses = $502 Million
6
* data not final
updated 2/2010
Washington Insurance Participation
– All Crops
Coverage in Millions of Dollars
2,000
1,500
1,000
500
0
2000
2.6M ac insured in
2009
7
* data not final
2001
2002
2003
2004
CAT
2005
2006
2007
2008 *2009
Buy-Up
Updated 2/2010
Washington Loss Payments – All Crops
Loss Payments in Millions of Dollars
350
300
250
200
150
100
50
0
2000
2001
2002
2003
2004
CAT
8
* data not final
2005
2006
2007
2008
*2009
Buy-Up
updated 2/2010
2009 Insurance Participation
Washington State - Fruit
Crops
Apples
Potential Insured
Acres
Acres
173,000 123,508
%Acres
Insured
+3K ac 71%
Amount of
Coverage
$413.5M
+$97M
Cherries
37,200
23,135
63%
Pears
25,200
14,490
57%
Grapes
62,700
46,312
75%
Fresh Peaches
2,850
1,502
53%
$2M
Fresh Apricots
1,100
757
69%
$1.7M
Fresh Nectarines
1,550
1,244
80%
$1.6M
+$105M
+$5M
+$1.1M
$150M
$28M
$57.5M
Updated 2/2010
2009 Insurance Participation
Washington State – other select crops
Potential
Acres
20,800
Insured
Acres
14,682
Dry Peas
142,000
129,811
+48K ac
91% +$10M $25.9M
Barley
125,000
43,807
-60K ac
35% -$12.5M
$6.5M
65,500
16,679
-12.5K ac
25%
$5.5M
155,000
105,320
68%
$139M
81,600
62,681
77%
$29.7M
2,420,000
1,931,974
Crops
Onions
Dry Beans
Potatoes
Sweet Corn
Wheat
%Acres
Insured
70%
+180K ac
Amount of
Coverage
$16.9M
-$.5M
80% +$317M $736M
updated 2/2010
Spokane Region Risk Management Tools
Production
Actual Production
History (APH)
Revenue
Group Risk
Income
Protection (IP)
Group Risk Plan
Revenue
Assurance (RA)
FSA
Uninsured
NAP Program
also available
Additional coverage
and endorsement
available for some
commodities
Crop Revenue
Coverage (CRC)
Group Risk Income
Plan
AGR-Lite
Pasture/
Rangeland/ Forage
(PRF)
Livestock Risk
Protection (LRP)
Apiculture (API)
AGR and
Actual Revenue
History (ARH)
*Livestock Gross
Margin (LGM) Dairy
Our job to tailor
programs and coverage
for producers we serve
* New Program for 2010
Multiple Peril Crop Insurance (MPCI)
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Protects producer’s loss of revenue resulting from low yields
Based on Producer’s individual Actual Production History (APH).
Actual Production History (APH): Actual amount of production from a
farm unit used to determine the insurance guarantee (4 build to 10 average)
Insured can purchase from 50 up to 75%
(85% on some crops) coverage based
on Average APH on Insurance Unit
If unit yield is below production guarantee
insured gets paid a set amount (price election)
for every bushel/lb, etc. below production
guarantee.
Most crops include quality coverage
MPCI – Causes of Loss
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Adverse weather conditions
Fire
Insects
 if adequate control measures applied
Plant disease
 if adequate control measures applied
Wildlife
Earthquake
Volcanic eruption
Failure of the irrigation water supply due to an
unavoidable cause of loss occurring within the
insurance period
Revenue Plans Available in PNW
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Revenue Assurance (RA)
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Barley
Canola
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Wheat
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Income Protection (IP)
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Idaho, Oregon and Washington – Spring Only
Idaho AND NEW for 2010 Oregon and Washington
Spring Only
Idaho only – Winter and Spring
Barley
Wheat
Idaho, Oregon and Washington
Idaho Oregon and Washington
Crop Revenue Coverage (CRC)
Corn
Idaho, Oregon and Washington
 Wheat
Idaho, Oregon and Washington
These products provide coverage to protect against loss of revenue
14 caused by low prices or low yield’s or a combination of both.

Other Revenue Based Plans
Revenue Plans
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Adjusted Gross Revenue *
Adjusted Gross Revenue-Lite (AGR-Lite) *
Livestock Risk Protection (LRP) [Cattle, Sheep, Swine]
Livestock Gross Margin (LGM) [Dairy]
Program availability varies by crop / state / county & is subject to change.
*whole farm insurance – all ag commodities produced are eligible for
insurance based on insured adjusted gross revenue on a whole farm
basis. Nearly 100 different commodities insured in Washington State
many of which don’ t have separate MPCI policies available.
Catastrophic (CAT) Crop Insurance
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What does this policy cover / provide?
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Catastrophic loss
50% deductible
55% of established price
Basic Unit
What doesn’t this policy cover / provide?
Optional units
 Price fluctuation on crops like wheat/barley with revenue
protection
 Other policy options
Cost: $300 per crop / county *
*Waivers are available to Limited-Resource Farmers
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Recent Program Changes in Washington
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Barley and Canola Revenue Assurance (RA)
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Potato Policy
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Expansion into all Barley and Canola counties
Whatcom County: Final Planting Date changed from May 31
to June 15
Grape Policy Changes for 2010
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17
Insure by varietal type, (expanded from 5 groups to 23
varietal specific types)
May insure the value of grapes at the contract price (less
harvest cost)
Expanded into seven Western Washington counties: Clark,
Island, Kitsap, Mason, Pierce, San Juan, Skagit
Recent Program Changes in Washington
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Mustard Policy
 Converted to regulatory program (Asotin, Columbia, Garfield, Lincoln,
Spokane, Walla Walla, and Whitman).
Cabbage Policy
 Insurance will not attach to any acreage planted to cabbage or any other
Brassicaceae crop (e.g., cauliflower, broccoli, etc.) in either of the two
previous crop years unless a written agreement request is initiated prior
to sales closing date.
Specialty Use Barley for 2010
 5 types covered
 Must be under contract
 Allows insured to insure based on contracted price
 Implement of 2010, except fall barley counties will be implemented in
2011
18
Recent Program Changes in Washington
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Dry Peas / Lentils
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Buckwheat
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New policy 2009
Expanded into Douglas County, WA for 2010
 Fall and Spring planted Austrians,
 Fall and Spring planted Smooth Green or Yellow
 Fall and Spring planted Lentils
Winter Coverage for 2010
 Asotin, Douglas, Lincoln, Whitman
WA Expansion 2010
Grant, Franklin and Walla Walla counties
Apple Policy

19
Proposed rule is out for comment. RMA plans to have the final rule published
for 2011 crop year.
Recent Program Changes in Washington
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
Livestock Gross Margin (LGM)
 Expanded into all WA counties
 The Livestock Gross Margin for Dairy Cattle Insurance Policy
provides protection against the loss of gross margin (market value of
milk minus feed costs) on the milk produced from dairy cows.
Livestock Risk Protection - Lamb
 Expansion to Washington State
 Changing the limit for an individual Specific Coverage Endorsement
(SCE) from 7,000 to 2,000 head
 Addition of a 20 week endorsement to better fit the production and
marketing cycles of range and inter-mountain operations
 A change from the ‘formula live’ AMS price series to the ‘formula carcass’
AMS price series converted to a live basis by use of the dressing percent
to establish coverage
20
Washington: Adams, Benton, Chelan,
Douglas, Franklin, Grant, Klickitat,
Okanogan, Walla Walla and Yakima
Huge increase in business in 2009 with 23,172
acres insured - $151 M in coverage and as of 2/8
$23.4 M in losses with many still being worked.
Problems with Warehouses not accepting fruit.
PNW Cherry Coverage
New ARH Policy
Comparison 2008/2009
200
150
RMA met with hundreds of industry
representatives and AIP’s and worked through all
the issues as best we could providing maximum
flexibility within the constraints of the policy
100
50
0
2008
2009
PNW Cherry Coverage
$ in Millions
2010 Business looks promising even after the problems we
had in 2009. Policies sold increased from 955 to 1,062.
RMA modified the quality standards in Washington to reflect
Washington’s Marketing Order and revised the Underwriting
Guides and Loss Standards
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Probably the single most important and
fundamental change in the program in over 20
years – big rollout planned this year
One policy will provide yield protection, revenue
protection, revenue protection w/the harvest price
exclusion
CRC (Crop Revenue Coverage), RA (Revenue
Assurance), IP (Income Protection), and IIP
(Indexed Income Protection) are replaced by the
following two new plans of insurance:
 Revenue Protection
 Revenue Protection w/the
Harvest Price Exclusion
Comb
Partnership Agreements

The Risk Management Agency (RMA) is committed to
Alaska, Idaho, Oregon, and Washington agricultural
producers by:
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Providing Risk Management information and training,
Establishing research projects to create additional tools for
farmers/ranchers to better manage their risks, and
Providing community outreach to traditionally underserved producers.
The Agriculture Risk Protection Act of 2000 (ARPA)
earmarked funds for RMA to form “partnerships” with public
and private organizations. Alaska, Idaho, Oregon, and
Washington agricultural producers have benefited from over
$13.6 million since FY 2001, for outreach, education, and
research.
2010 Announcement Published in Federal Register
Washington Partnerships (active in 2010)
OUTREACH Partnerships
“Building Blocks for Risk Mitigation for Socially Disadvantaged Farmers and Ranchers”
Rural Community Development Resources
Provide outreach and technical assistance to underserved/unserved farmers/ranchers to meet
RMA’s strategic goal of ensuring their customers and others are well informed.
“Mobile Workshops for Women, Underserved, Latino and Socially Disadvantaged Farmers and Ranchers”
Washington State Department of Agriculture
Help Latino and women producers understand the variety of risk management tools available to
help make risk management choices to better manage their farms in Washington State.
Education SMALL SESSION Partnerships
“Risk Management Training for Washington Livestock Producers.”
Custom Ag Solutions
Provide risk management training opportunities for 250 Washington livestock producers expected
to participate in the 2009 Washington Cattlemen’s Association Annual Meeting.
Spokane Regional Office
Dave Paul, Director
11707 E. Sprague Ave, Suite 201
Spokane Valley, WA 99206
509-228-6320
www.rma.usda.gov
1-800-205-9953 Toll Free
 RMAs

New Online Resource Tool
USDA Risk Management Agency home page
◦ http://www.rma.usda.gov/

OR
◦ http://farm-risk-plans.usda.gov/