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Pilot Biotech Yield Endorsement

(Quick Reference)This is available in a

two page handout.

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Availability• Available for NI Grain Corn • APH, CRC, & RA plans only; not available for

CAT coverage policies– Pilot Area - states of IL, IN, IA, & MN

• Qualifying Hybrid that contains a combination of three proprietary biotech traits developed & licensed by the Monsanto Company– YieldGard® Corn Borer, YieldGard® Rootworm,

and Roundup Ready®Corn2.

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Result of Qualification• A Premium Rate Reduction will be applied at unit level

– EU – rate reduction will be applied to overall unit, not underlying basic or optional unit.

– WU – rate reduction will be applied only to insured corn acreage planted, not to other crops in whole farm unit or to underlying basic or optional unit.

• Premium rate reduction amount will vary by county, coverage level, plan of insurance and possibly by year.

• For Revenue plans the BYE rate reduction is determined and applied to the yield risk component of the premium calculation.

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Eligibility• To be eligible for above premium rate reduction all of

the following conditions must be met:– Insured must comply with all the terms of conditions of the

BYE Endorsement provisions.– Must have an eligible policy and plan of insurance.– Insured must separately identify on the acreage report each

unit meeting the requirement of the following:• Basic & Optional units – as least 75 % of the total insured

corn acreage planted, including any replanted acreage, in the unit must be NI corn for grain planted to qualifying hybrid.

• Enterprise & Whole Farm units – at least 75% of the total insured corn acreage planted, including any replanted acreage in the enterprise or whole farm unit must be NI corn for grain planted to a qualifying hybrid.

Continued Next Slide

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Eligibility• To be eligible for above premium rate

reduction all of the following conditions must be met:– On or before the acreage reporting date the

insured must submit all of the following:• A completed and signed BYE seed dealer Certification

Statement.*• Copies of purchase and return seed invoices that

correspond to the BYE Seed Dealer Certification Statement.

• A signed BYE Insured’s Certification Statement.*

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Spot Checks, Reviews and Compliance

• Spot-checks and reviews may be performed at any time by the company, anyone authorized by the company, or any employee of the USDA authorized to investigate or review a matter related ot crop insurance, to verify:– Compliance with the terms and conditions of the

endorsement, including testing of plants for the presence of the required traits or

– The information certified on the BYE Seed Dealer Certification Statement, including verifying the amount of qualifying hybrid seed obtained is adequate to meet the eligibility requirement #3

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Spot Checks, Reviews and Compliance• If an insured is selected for spot-check or review:

– Policyholder information will be provided to the applicable person for conducting the compliance activities, including testing for the presence of the required traits; and

– The insured will be required to identify the physical location of the NI Grain corn acreage planted to a qualifying hybrid, and the physical location of any other corn planted within the unit. If the NI Grain Corn acreage planted to qualifying hybrid and any other corn is planted in alternating rows the insured must specify the manner in which such acreage is planted.

– If the insured does not comply with all terms and condition of the endorsement on ANY unit reported as eligible for the BYE premium rate reduction, or false or fraudulent certification is provided;

• The policy will be voided.• The insured may be subject to administrative, civil, or criminal

sanction, as applicable under the basic provisions.• The insured still may be required to pay 20% of the premium

due under the policy in accordance with section 27 of the Basic provisions even though the policy is void.

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Other Information• The BY Endorsement is only applicable to

planted acreage. Not to pp acreage in the unit.

• The BY Endorsement can be applied to written agreements for changes in premium rate or transitional yield for designated high-risk land or written agreements that establish optional units. No other written agreement units will be given the premium rate reduction for BYE.

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Frequently Asked Questions

This is available in a

three page handout.

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Question 1• When will agents receive a list of the

hybrids that will qualify for the BYE discount?

– RMA Response: The Monsanto Company is developing a website that will provide a list of hybrid corn seed that meet the definitions of qualifying hybrid for the Pilot BYE purposes.

– Monsanto Response: There will be a website available by February 05, 2008 that will provide this information.

• www.biotechyieldendorsement.com

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Question 2• If an insured plants 100% of a unit to the triple

stack, will he qualify for the discount? – RMA Response: The planting requirement of the Pilot

BYE is that at least 75 percent of the total insured corn acreage planted, including any replanted acreage, in a unit must be non-irrigated corn for grain planted to a qualifying hybrid. Therefore, yes the insured would qualify if your question was specific to 100% of the unit being planted to non-irrigated corn for grain.

– Monsanto Response: YES; however the grower will not be compliant with refuge requirements so this is not recommended. The insurance agent will not be responsible or liable for policing the refuge.

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Question 3• Can refuge acres be inter-planted between the

rows of triple stack corn? – RMA Response: The Environmental Protection

Agency (EPA) is responsible for refuge requirements applicable to biotech corn.  You should contact the EPA if you have questions regarding the refuge requirements for biotech corn.  Also, it is solely the producer’s responsibility to assure they comply with any EPA mandates.  It is however, our understanding that refuge acres can be inter planted throughout the field.

– Monsanto Response: YES – If this grower is selected for a spot check – it will be important to understand how the refuge was planted.

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Question 4

• Do refuge acres need to be planted distinctly by themselves?

– RMA Response: Same response as to #3– Monsanto response: NO

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Question 5• If an insured needs to replant, and triple stack

hybrids are no longer available, and he replants with a conventional hybrid, will he no longer be certified and will his policy be cancelled?

– RMA Response: I am not sure what you mean by "will he no longer be certified".   On its face value the answer to your question would be he would no longer qualify for the BYE discount but the acreage could remain insured.  The availability of the Pilot BYE does not guarantee the availability of qualifying hybrid seed (see section 6 of the Pilot BYE).  

– Monsanto Response: YES - Based on the current supply of YieldGard® Triple Stack this should not be an issue.

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Question 6• How much of a role will the AIP play in the certification

process? Will the agent ultimately be responsible for completing the certification process?

– RMA Response: I am not sure what you mean by "certification process"?  See paragraph 2 of the Pilot BYE handbook for AIP responsibilities.   Ultimately it is the insured’s responsibility to provide the producer certification, the seed dealer certification and during acreage reporting disclose to the agent which units were planted to a qualifying hybrid.  As with other crop insurance requirements; the agent would confirm such were received from the insured.

– Monsanto Response: The agent will need to inform the grower of the details – There are two forms that need to be completed the insured’s certification form and the seed dealer certification form. There will likely be some assistance needed by the agent to the grower on the seed certification form.

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Question 7• If a farmer plants 2000 acres of BYE corn and has 32

landlords which of their names are to be on the dealer certification form? If the land is owned by a man and wife are both names to be on the certification form?  If the land is owned by a corporation; are all owners’ names to be on the form?

– RMA Response: The person that purchases the qualifying hybrid must be listed on the BYE Seed Dealer Certification Statement in item 2A.  Each person that purchases a qualifying hybrid must complete a separate BYE Seed Dealer Certification Statement.   If more than one person will share in the same qualifying hybrid seed, such as a landlord and tenant that both share in the crop, each person must be listed on the BYE Seed Dealer Certification form in item 5A (see Pilot BYE handbook subparagraph 12B).  Also see the examples in paragraph 13 of the Pilot BYE handbook.

– Monsanto Response: Question for RMA – I have sent for clarification.

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Question 8• Who pays for the spot check tissue

mailing and testing? – RMA Response: The cost of the mailing of the

plant tissue samples and the cost of the trait expression tests performed by the independent laboratory is paid for by the Monsanto Company for the 2008 crop year.

– Monsanto Response: Monsanto will cover the cost of sample materials, the mailing and the lab tests for the 2008 pilot. The AIP will provide individual to collect samples.

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Question 9• If an insured were to” flunk” a spot test

the policy is voided; are the regular corn and beans planted void as well?

– RMA Response: The definition of "policy" in the Basic Provisions specifies that "Insurance for each agricultural commodity in each county will constitute a separate policy."  Therefore, voidance of a corn policy because of non-compliance with the Pilot BYE does not affect the insured's other crop policies.

– Monsanto Response: Need clarification on question

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Question 10• If a BYE claim is > $100,000 is the “complete” or

“mini” spot check done (tissue samples sent in as outlined in the spot check section for 3% of liability <$500,000) or is a more simpler spot check done.

– RMA Response: Policies that are eligible for the Pilot BYE premium rate reduction and have loss claims in excess of $100,000 must be spot-checked according to Part 3, Section 2 of the Pilot BYE handbook.  Paragraph 42 of the Pilot BYE handbook provides that AIP's are not required to collect plant tissue samples for trait expression testing for such policies.

– Monsanto Response: No spot check or tissue sample - simply paperwork review

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Question 11

• If a “complete” spot check is performed how do you collect green tissue samples; as outlined in the procedures; after the crop is harvested?

– RMA Response: Same answer as to #10– Monsanto Response: N/A

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Question 12

• Is the BYE spot check in addition to the regular > $100,000 claim audit?

– RMA Response: Subparagraph 41A of the Pilot BYE handbook provides that the required spot-checks of policies with loss claims in excess of $100,000 is in addition to those required in the SRA.

– Monsanto Response: none

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Question 13• Question on seed rate when reporting qualification - when

using 2.7 acres per unit (29,600 population) to verify the quantity the rules say if the insured uses a different seeding rate and tells the agent something outlandish like 50,000 population or an unusually small population; how does the agent document that; so the agent will not get into trouble for certifying the quantity; is there going to be a form to use for that that the insured signs?

– RMA Response: There is no required form for either the AIP or insured to sign regarding the seeding rate.

– Monsanto response - If a grower increases his seeding rate dramatically that would increase the bags he would need to purchase so there would not be an advantage to do so. The average seeding rate for this market is 28,500 and many times higher than this. If the grower states something significantly less than that should issue a red flag. On the insured’s certification form the grower is committing that the information provided on the seed certification form is accurate. If it is not the grower would be liable.

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Question 14• What if the policy has CRC corn coverage in

more than one county, the insured plants 100% BYE and wants the discount in all counties? Are the certification forms (insured and dealer) to be done by policy or policyholder; if by policy holder are they to be broken out by county?

– RMA Response: The BYE Insured's Certification Statement is by Policy (see Pilot BYE handbook, subparagraph 12A and Exhibit 4).  The qualifying hybrids must be listed by policy on the BYE Seed Dealer Certification Statement (see Pilot BYE handbook, subparagraph 12B and Exhibit 5).

– Monsanto Response: Need to confirm answers with RMA; my understanding is by policy.

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Question 14 a

• In the same example above, will spot checks be pulled by policy or policyholder?

– RMA Response: The Pilot BYE spot-checks are by policy (see Pilot BYE handbook, subparagraph 31A, and subparagraph 41A)

– Monsanto Response: My understanding is by policy.

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Question 14 b• Is the calculation to insure proper amount of

seed is purchased done by county or total by purchaser?

– RMA Response: The verification of sufficient quantity of seed to meet the planting requirements is by unit (see Pilot BYE handbook, subparagraph 21B).

– Monsanto Response: By County• What if the insured elects the discount in one county and not the

other?– RMA Response: See answers above.– Monsanto Response: See Above

• What if the insure has GRIP in one county and CRC in the other and wants the discount in the CRC county? – RMA Response: See answers above– Monsanto Response: Apply by Policy in the CRC County

• What if the insured has CRC coverage in one county and wants the discount, but has no coverage in the other county? Is the uninsured county part of the spot check as well?– RMA Response: If the producer does not have a corn insurance

policy in a county, there is no policy to spot-check in the county.– Monsanto Response: No

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Question 14 c• In the scenario above; for all counties the guy buys seed in

February for 1000 acres – 500 in county A, 200 in county B, and 300 in county C and he gets appropriate forms done in February; at planting it is wet and he ultimately abandons planting 400 acres to corn (200 in county A, 50 in B and 150 in C) and goes to beans in late may. Must he get all paperwork redone from the dealer and his certification forms; or can we use return credit slips to make adjustments in original February certification forms?

– RMA Response: By signing the BYE Seed Dealer Certification Statement the seed dealer is certifying the total number of units of qualifying hybrid corn seed listed is the total net (purchased minus amount returned) - see Pilot BYE handbook, subparagraph 12B and exhibit 5.  Therefore, if qualifying hybrid seed is returned to the seed dealer after the seed dealer signed the BYE Seed Dealer Certification Statement, the seed dealer must correct the inaccurate BYE Seed Dealer Certification Statement.

– Monsanto Response: No – He will not be able to complete the Seed Dealer Certification Form until June at acreage reporting time because the invoices he needs to obtain will need to be after returns. The dealer cannot certify the final purchase until he has made all returns etc.

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Question 15

• Is it the agent's responsibility to ascertain if the landlords and other business relationships are correct on the seed dealer certification form?

– RMA Response: No.– Monsanto Response: The grower is

responsible for supplying this information accurately to the agent.

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Question 16

• Is it the agent's responsibility to ascertain if the landlords and other business relationships are correct on the insured's certification form?

– RMA Response: Only the insured is listed on the BYE Insured's Certification Statement (see Pilot BYE handbook, subparagraph 12A and Exhibit 4).

– Monsanto Response: ???

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BYEInsurance Standards

Handbook

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• Review of outline

2. Responsibilities – Page 2– AIP Responsibilities

• Offer to all eligible policyholders, supply copy of BYE endorsement to policyholder, and verify hybrid, quantity, acres accurately coded, yield production data, and also perform spot checks

BYE Insurance Standards Handbook

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• Review of outline

2. Responsibilities – Page 2– Insured Responsibilities

• Meet all requirements, comply with all terms and conditions of BYE, identify qualifying acres and units, and if needed physical location of all BYE corn acres (BYE and other corn)

BYE Insurance Standards Handbook

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• Eligibility – Pilot BYE Premium Rate Reduction – Pages 3-5– Applicability - Applied at unit level

• Basic, Optional, Whole Farm, Enterprise– Eligibility Requirements – Acres must be in

the pilot area, must be an eligible policyholder, and have an eligible plan of insurance (APH, RA, CRC)

– Prevented Planting Acreage – Planted acres only – NO Prevented Planting Acres

BYE Insurance Standards Handbook

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• Certification Statements – Pages 8-12– BYE Insured’s Certification Statement

– BYE Seed Dealer Certification Statement

• BYE Seed Dealer Certification Statement Examples – Pages 13-20

BYE Insurance Standards Handbook

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• AIP Verification of Seed hybrid and Sufficient Quantity – Pages 20-24– Verification of Seed Hybrid

• www.biotechyieldensorsement.com • Or call 1-800-768-6387

– Verification of Sufficient Quantity• Verify with seed invoices on purchased or

refunded seed - – Number of units purchased– Number of acres

BYE Insurance Standards Handbook

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• Acreage Report – Page 25– Report only qualified acres

BYE Insurance Standards Handbook

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• Spot Checks– Required Spot-Check of Randomly

Selected Policies• Spot-checks and reviews may be

conducted at any time to verify both of the following

– Compliance with the terms and conditions– Information contained on the BYE Seed

Dealer Certification Statement

BYE

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• Spot Checks – AIP Responsibility– Required Spot-Check of Randomly

Selected Policies• All policies identified as eligible for the Pilot that

have loss claims in excess of $100,000• 3 percent of all po9licies identified as eligible for

the Pilot with total liability for all insured corn less than $500,000

• 5 percent of all policies identified as eligible for the Pilot with total liability for all insured corn greater than $500,000

BYE

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• Spot Checks– Collecting and Shipping Plant Tissue

Samples• Trait expression test is performed to determine

both– Whether the plant tested contains all three of the

proprietary biotech traits– Whether the planting requirements were met for the

unit

• For the Pilot BYE the presence must be determined by one of the following laboratories

– BioLab Solutions– Illinois Crop[ Improvement Association

BYE

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• Compliance– Insured shall be determined NOT to be in

compliance with the Pilot BYE if any of the following occur

• Not have an eligible policy• Acreage in the unit is not located in the pilot area• Planting requirements are not met on any unit• Insured does not provide before the acreage reporting

– Signed and dated BYE Certification– Completed, signed, and dated Seed Dealer

Certification– Copies of purchase and return seed invoices– Acreage report identifying acreage and unit(s)

• Insured provides false or fraudulent certifications• Trait expression test result for any unit is negative

BYE

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• Compliance– Voiding Policies

• Insured determined not to be in compliance on ANY unit identified on acreage report as eligible for BYE

– Insured’s policy shall be VOIDED• Voidance will be effective on the first day of the insurance

period– However, the voidance of the policy will not affect the

insured’s ability to obtain crop insurance in subsequent years

• AIP may require the insured to pay 20 percent of the premium due based on premium amount that would have been due without the Pilot BYE premium rate reduction

• In addition to the policy being voided, administrative, civil or criminal sanctions may be applicable in accordance with the Basic Provisions

BYE

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BYE Insured’s Certification Statement - Draft

Collection of Information and

Data (Privacy Act) and

Nondiscrimination Statement must

be attached

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BYE Seed Dealer Certification Statement - DraftCollection of Information and Data (Privacy Act) and Nondiscrimination Statement must be attached

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• Biotech Yield Endorsement Seed Dealer Certification Statement– Exhibit 5– Each insured on the BYE Seed Dealer Certification

Statement that is eligible for the BYE premium rate reduction is responsible for both of the following

• Ensuring accuracy of their information• Providing their AIP(s) a copy

– Completed, signed, and dated BYE Seed Dealer Certification Statement(s)

– Purchase and return seed invoices that substantiate the information provided on the BYE Seed Dealer Certification Statement

BYE