Policy changes boost crop insurance options

Ray Mueller

FOND DU LAC - hole farm revenue protection is one of the relatively new options in the federal crop insurance program, Badgerland Financial specialists reminded clients at a winter information meeting.

The new product combines revenue from all agricultural activities by a farm enterprise into one policy, Laurie O'Brien pointed out. She explained that the purpose of the new policy is to recognize the production of organic and specialty crops, all income from animal production (including milk sales), and such crops as milo and rye along with the more conventional crops grown on most farms.

Five years of data from the income tax Schedule F form are used as the revenue base for the whole farm policy, Jim Christensen pointed out. He strongly recommended having that policy serve as a piggyback to the long-standing multi-peril policies that provide coverage for particular major crops.

New private policies

In addition to providing the standard crop insurance policies that are governed by federal regulations, the insurance companies, which provide and administer the coverage have devised numerous companion optional add-ons.

Among those being offered by one or more companies and being expressed in differing terminology and acronyms are policies which allow insured growers to pick months other than February and October as the reference for the futures pricing which is used in the guaranteed revenue for corn and soybean policies, O'Brien noted. For additional premiums, other possibilities are a policy which insures yields from the top rather than the bottom and a boosting of the selected price to 120 percent, she stated.

O'Brien reminded farmers of the hail and wind policies which are also offered only by the private companies and which, despite the title, also cover losses by fire, during transportation, and from vandalism (for which a police report is required to verify the damage). Growers who anticipate the possibility of hail, based on weather forecasts, enjoy a 24-hour window before any such storm in order to obtain a wind and hail policy.

Current concerns

Given the mid-winter weather in the area, O'Brien cited the possibility of loss of alfalfa and winter wheat stands – similar to what happened in the spring of 2013. She emphasized that farmers need to get an appraisal of plant counts before destroying the crop in order to qualify for the payment appropriate to the insurance coverage they have.

Another fairly new policy that is based on local weather is known as Pasture, Rangeland, Forage. As one of the options in the federal insurance program, it provides payments based on rainfall (typically the lack of it which limits forage growth) measured in local grids, O'Brien explained.

In the case of prevented planting, the current payment rates are 55 percent of the insured guarantee for corn, 60 percent for soybeans, and 40 percent for canning crops but buy-ups of 5 or 10 percent for 25 or 50 cents per acre are available, O'Brien noted. Growers of silage specialty corn (brown mid-rib) would receive payments on yield losses measured in tons per acre rather than on bushels of grain, she added.

For spring planted crops, March 15 is the deadline for making any changes on the levels of coverage, the crops being covered, or the acreage being insured. It is also the deadline for new crop insurance enrollment – for which beginning farmers are entitled to a discount on premiums for five years.

Reporting requirements

Christensen emphasized that the federal Risk Management Agency, which oversees the crop insurance program, is making proper documentation of the records on insured crop yields a point of emphasis. He said Badgerland Financial has a worksheet to help clients in complying.

In all cases, either a written or printed record is needed for the loads and weights, Christensen remarked. Production must also separated by land sections and not commingled in the reporting data, he observed.

Conservation compliance on all owned and rented land for which crop insurance is in place is also required if the operator wants to have the premium reduced by the federal subsidy. To be legal on that point, the AD-1026 form must be filed at the county Farm Service Agency (FSA) office.

The promised Acreage Reporting Streamline Initiative, which would provide a one-stop report to both the FSA and the crop insurance agents on the insured acres, is not working in Wisconsin because the computers used by the two entities are not properly linked to share the data, Christensen reported.

One convenience that Badgerland Financial is providing for its clients is the opportunity to electronically sign documents via their smartphone without even requiring a log-in.

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