Omaha, Nebraska – (August 12, 2010) – Farmers who insure yield or revenue for fall-planted crops will be among the first to deal with changes that will affect all policies for crops produced in 2011.
The deadline for securing coverage of fall crops – primarily winter wheat – is Thursday, September 30, notes Rhonda Smith, vice president of insurance for Farm Credit Services of America (FCSAmerica). The company serves farmers and ranchers in Iowa, Nebraska, South Dakota and Wyoming.
“There are a number of changes that will affect crop insurance coverage going forward,” said Smith. “One of the more significant is that the old Crop Revenue Coverage and Revenue Assurance policies have been combined in a Revenue Protection policy. Also, what was Actual Production History (APH) coverage now for some crops is called the Yield Protection policy.”
Smith said that, for most crops, the method of setting prices is changing, too.
“The USDA’s Risk Management Agency (RMA) formerly set prices for APH policies,” she said. “Going forward, projected prices for most crops will be based on information from the markets – the Chicago and Kansas City boards of trade, and the Minneapolis Grain Exchange.”
The RMA will continue to establish prices for crops not traded on one of the three exchanges, Smith adds.
Recordkeeping Requirements Tightened
There are several other crop insurance changes – some of them mandated in the new Standard Reinsurance Agreement (SRA) – that will affect farm operators.
“The SRA regulations put a premium on accurate recordkeeping,” she explained. “For example, all claims that exceed $100,000, including losses from commodity price changes, will be reviewed. If production records do not match what was reported to the insurance company, producers will be required to provide production records for the last three years.
Smith said FCSAmerica also is seeing initiatives to match Farm Service Agency records with information reported to insurance companies, so there is a need for greater accuracy from producers.
“Whether they plant fall crops or not, we’re advising farmers to consult with their crop insurance agents early in the process,” she said. “Some time will be required to become familiar with these new crop insurance coverages and to evaluate how they affect each producer’s operation.”
Smith notes that FCSAmerica crop insurance specialists already are familiar with the new regulations and coverages. More information is available by contacting local specialists or by visiting www.cropinsurancespecialists.com.