2. HOW IT COMES TOGETHER
• FCIC
Federal Crop Insurance
Corporation
• RMA
Risk Management Agency
• AIPS
Approved Insurance Providers
• Agencies and
Agents
3. WHAT ARE THE MAJOR
RISKS FACING YOUR
OPERATION?
•
•
•
•
•
•
•
•
•
Drought
Excessive Moisture
Excessive Heat
Hail, lightning, wind
Insects and Wildlife
Cold, frost, freeze
Disease
Price variations
Others?
4. ELIGIBLE PERSONS
• Be Competent
• Be of legal majority, 18 years or
older, or conferred by court
• Have an insurable interest in the
crop at the time coverage begins
• Provide applicable identification
number and person type
• NOT be ineligible
8. APH
ACTUAL PRODUCTION HISTORY
• Reporting production is done, by unit
• Acreage must be reported separately,
by unit
• Coverage is provided separately, by
unit
• Harvested production must be
maintained, by unit
• Indemnities determined, by unit
10. BASIC UNIT
• The building blocks of a policy. A policy’s coverage
broadens or becomes more localized if the insured
elects unit structures other than basic units.
• Determined first by crop then by share arrangement
1. 100% share ownership or
2. Which is owned by one person and operated by
another person on a share basis
11. OPTIONAL UNIT
• The units must be located in separate sections,
section equivalents, or separate farm serial number
(FSN)
• Irrigated and Non-Irrigated Practices
• Organic and Conventional Farming
• Written Agreement
• The insured must have the prior year’s production by
section reported to the company no later than the
Production Reporting Date of the current crop year
12. ENTERPRISE UNIT
• All insurable acreage of the same insured crop in the
county in which the insured has a share on the date
coverage begins for the crop year
• Must be elected by sales closing date
• Available for:
• - Revenue Protection
• -Yield Protection
• -Non-revenue crops if allowed by special provisions
• Election is continuous, unless insured notifies agent
by sales closing
• Enterprise unit must contain same crop on 2 or more
sections.
13. WHOLE FARM UNIT
•
All insurable acreage of all the insured crops
planted in the county in which the insured has a
share on the date coverage begins for each crop for
the crop year.
• With Revenue Protection elected
• Without Revenue Protection only if in the special
provisions.
15. PLANS OF COVERAGE
vs
TYPES OF CHOCOLATE
• CAT
• ARPI (formally GRP)
• YP – Buy Up 85%
• RP
• Dollar Store
• Hershey
Minatures
• Dove Chocolate
• Ghirardelli
16. CATASTROPHIC RISK
PROTECTION
•
•
Individual policy/ APH data base
Guarantees bushels per acre against a
catastrophic loss
• Coverage level- 50% of APH @ 55% of
established market price
• $300 Admin fee per crop per county
• Basic units only
17. ARPI formally GRP
• Area Risk Protection Insurance
• Coverage based on an area, not an
individual, yield or revenue amount.
3 plans
• ARP – Area Revenue Protection
• ARPHPE Area Revenue Protection w/
Harvest Price Exclusion
• AYP – Area Yield Protection
18. MULTI-PERIL (YP) PLAN
• Individual Policy/ APH Data Base
• Guarantees bushels per acre
• Coverage Levels Available
– 50% to 85% of Approved Yield
• Premium rate is determined by APH,
Level, Price, and County
• Basic, Optional, and Enterprise Units
Available
• Gov’t. Subsidy % varies by level
19. REVENUE PROTECTION RP
• Individual Policy/ APH Data Base
• Guarantees bushels per acre
• Coverage Levels Available
– 50% to 85% of Approved Yield
• Premium rate is determined by APH,
Level, Price, and County
• Basic, Optional, and Enterprise Units
Available
• Gov’t. Subsidy % varies by level
20. Assume: Wheat NI
Coverage Level:
Base Price:
Harvest Price:
Actual Harvest
RP Example
45 Bu average yield
70%
$7.02/ Bu*
$6.25/ BU* (Example Price only)
20 bu/ac
Minimum Guarantee Calculation
Approved Yield
45 Bu/Ac
X Base Price
X
$7.02*
X
X
Indemnity Payment Calculation
Calculated Revenue
Actual Yield X Harvest Price =
20 Bu/Ac X
$6.25/ Bu* =
Indemnity Payment
Minimum Guarantee $ 221.13
-
Coverage Level
70%
=
=
Base Guarantee
$221.13
Calculated Revenue
$125.00/ Ac
Calculated Revenue
$125.00 Ac
= Indemnity Payment
=
$96.13/ Ac
* Note: All prices used in this illustration are for illustration purposes only and do not portray actual prices used
for loss calculation!
21. Calculating The Value of the Crop Not
Covered Under the MPCI Policy
$ Coverage By Level
Under MPCI Coverage
APH Plan
CROPS
ACRE
AV
Yield
WHEAT
1
CORN
$ Not Covered by
Level
Under MPCI Coverage
MP PRICE
Crop
Value
45
$
7.02
$
316
$
205
$
221
$
237
$111
$95
$79
1
90
$
4.39
$
395
$
257
$
277
$
296
$138
$118
$95
GSORG
1
70
$
4.30
$
301
$
196
$
211
$
226
$105
$90
$75
SBEAN
1
30
$
12.87
$
386
$
270
$
290
$135
$116
$96
65%
$ 251
70%
75%
65%
70%
75%
22. Things to Remember
• Sales Closing dates
•
•
Spring planted crops March 15, 2014
Fall planted crops September 30, 2014
Check to make sure tax id #’s are correct
Martial status
Any entity changes
Changes to FSA #’s, shareholders, shares
Are you adding any land to your farming operation?
Have you acquired any acreage in another county?
Do you want to make changes to levels or types of coverage?
Production History and Unit Structure
•
This is not an all inclusive list, however these are some important things to remember.
