noninsured crop disaster assistance program. agriculture & business management introduction 2
TRANSCRIPT
NAPNoninsured Crop Disaster Assistance Program
Agriculture & Business Management
Introduction
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Agriculture & Business Management
What is NAP?
Noninsured Crop Disaster
Assistance
Program
• Risk protection
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Agriculture & Business Management
Application of Coverage
You must make an application for NAP on or before the application closing date for the crop/commodity in the county.
Eligible producers must apply for coverage of noninsurable crops using Form CCC-471, “Application for Coverage” and pay the applicable service fee at the FSA office where their farm records are maintained
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Agriculture & Business Management
Application of Coverage (Continued)
For basic CAT (Catastrophic) coverage The service fee is the lesser of :
$250 per crop, $750 per producer per administrative county, not to
exceed a total of $1875 for a producer with farming interests in multiple
counties.
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Agriculture & Business Management
Application of Coverage (Continued)
Basic CAT level is figured as 50% of the yield and 55% of the price.
Acres x share x (50%) yield x (55%) price
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Agriculture & Business Management
Service Fee & Premium
FSA will waive NAP service fees and reduce buy-up premiums by 50% for: Beginning farmers (BF) Limited resource farmers (LR) Socially disadvantaged farmers (SDA)
The completion of form CCC-860 is required.
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Agriculture & Business Management
Statutory Changes
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Agriculture & Business Management
Buy-Up Coverage
In addition to CAT-level coverage, NAP will offer buy-up coverage for the 2015 through 2018 crop years
Crops and grasses intended for grazing are excluded from buy-up coverage
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Agriculture & Business Management
Buy-Up Coverage (Continued)
Buy-up coverage levels:
Yield Level Price Level50% 100%55% 100%60% 100%65% 100%
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Agriculture & Business Management
Buy-Up Coverage (Continued)
In addition to the service fee, producers who elect buy-up coverage must pay a premium equal to the lesser of: 5.25% of the guarantee• Guarantee acres x share x yield x coverage level
(yield/price) x price x 5.25% 5.25% of the payment limit• CAP is $125,000 x 5.25% or $6563
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Agriculture & Business Management
Buy-Up Coverage (Continued)
For value loss crops, buy-up coverage will be based on the maximum dollar value for which the producer requests coverage
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Agriculture & Business Management
Buy-Up Coverage (Continued)
If the application closing date for a crop has passed before publication of the NAP rule, producers will have additional time to apply for retroactive buy-up coverage for that crop
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Agriculture & Business Management
Eligible Crops
Any commercial agricultural crop (excluding livestock and their by-products), commodity or acreage of a commodity grown for food or fiber, and commercial or industrial crops for which CAT or additional coverage (non-pilot) is not available.
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Agriculture & Business Management
Eligible Crops (Continued)
Additional eligible crops: Sweet sorghum Biomass sorghum
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Agriculture & Business Management
Eligible Crops (Continued)
Expanded definition of industrial crops – includes crops produced as a feedstock for: Renewable biofuel Renewable electricity Bio based products
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Agriculture & Business Management
Eligible Crops (Continued)
Crops are ineligible if either type of coverage is available under the Federal Crop Insurance Act: CAT under section 508(b) Additional coverage under sections 508(c) and
508(h) (excluding some pilot programs)
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Agriculture & Business Management
Acreage Reporting
Accurate and timely reporting• COF’s will review acreage reporting data with the
producer to verify accuracy• Producers must sign acreage report• Accurate acreage reports ensure program eligibility• Inaccurate acreage reports can result in loss of benefits or
improper payments• Total cropland report, all cropland on a farm must be
reported to ensure program eligibility
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Agriculture & Business Management
Acreage Reporting (Continued)
Acreage reports must be filed by the final acreage reporting date
Exceptions• If crop is not planted by the final reporting date the
producer has 15 calendar days after planting is completed• Producer acquires a lease after the final reporting date –
producer has 30 calendar days after acquiring the lease to report
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Agriculture & Business Management
Limitations and Eligibility
$125,000 payment limitation
$900,000 AGI provision
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Agriculture & Business Management
Notice of Loss
A Notice of Loss (NOL) should be filed timely.• during the coverage period• within 15 days that loss becomes apparent
Producers of hand harvested crops shall notify COF within 72 hours and file NOL within 15 days of earlier of occurrence or loss becomes apparent
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Agriculture & Business Management
Eligible Causes of Loss
Loss must occur from an eligible cause of loss during the coverage period before or during harvest
Eligible causes of loss apply the same to basic and buy-up coverage.
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Agriculture & Business Management
Damaging Weather
Drought Hail Excessive moisture Freeze Tornado Hurricane Excessive wind
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Agriculture & Business Management
Adverse Natural Occurrence
Earthquake Flood Volcanic eruption Any combination of the above
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Agriculture & Business Management
Ineligible Causes of Loss
Some examples:• Losses that are not direct result of an eligible cause
of loss in the coverage period• Failure to reseed or replant when practicable• Failure to follow good farming practices• Water contained or released
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Agriculture & Business Management
Application for Payment
Producer signs after the loss is filed and worked by an approved loss adjuster
No later than 60 days after normal harvest date
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Agriculture & Business Management
Production
The production reporting date (PRD) is the later of the acreage reporting date for the crop in the subsequent year or 60 days after the normal harvest date.
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Agriculture & Business Management
Buy-Up Example
Forage Sorghum◦ 100 Acres◦ 2 T Approved Yield◦ 2014 Price $137.33◦ 100% share◦ Not SDA/LR/BF◦ Selected 60/100 Coverage Level
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Agriculture & Business Management
Buy-Up Example (Continued)
Premium Calculation◦ Yield x Coverage Level x Price x Acres x Share = Guarantee
(used only for calculation of premium)◦ Guarantee x .0525 = Premium
So:◦ 2T x .60 x $137.33 x 100 Ac x 100% = $16,480◦ $16,480 x .0525 = $865 Premium for Buy-Up◦ The $250 Administrative Fee also applies.
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Agriculture & Business Management
Buy-Up Example (Continued)
Calculating the Payment Harvests 1 ton of Forage Sorghum. There was an
eligible cause of loss.◦ 2 T Yield x 60% coverage level = 1.2 T coverage◦ 1.2 T coverage – 1 T harvest = .2 T loss◦ .2 T loss x $137.33 x 100 Ac x 100% share = $2,747 NAP
payment.
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Agriculture & Business Management
Buy-Up Example (Continued)
If the same producer selected CAT only:◦ $250 administrative fee is only cost.
With the same 1 T harvest:◦ 1 T coverage (50%) – 1 T harvest = no covered loss. Zero
Payment
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Agriculture & Business Management
Questions???
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