Crop insurance changes proposed

USDA releases interim rule offering new beginning farmer benefits and changes providing additional flexibility to farmers.

The Risk Management Agency (RMA) released an interim rule outlining several actions it is taking to modify crop insurance inline with the requirements of the 2014 Farm Bill.

The provisions provide better options for beginning farmers, allow producers to have enterprise units for irrigated and non-irrigated crops, give farmers and ranchers the ability to purchase different levels of coverage for a variety of irrigation practices, provide guidance on conservation compliance, implement protections for native sod and provide adjustments to historical yields following significant disasters.

Some of the changes will go into effect in the fall of 2014 while others will not happen until 2015.  Public comments on the rule will be accepted through September 2, 2014.

"Crop insurance is critical to the ongoing success of today's farmers and ranchers and our agriculture economy. These improvements provide additional flexibility to ensure families do not lose everything due to events beyond their control," said Vilsack. "We're also acting to provide more support to beginning farmers and ranchers so that they can manage their risk effectively. We need to not only encourage new farmers to get into agriculture, we must ensure they're not wiped out in their riskiest initial seasons so they can remain in agriculture for years to come."

The Farm Bill authorizes specific coverage benefits for beginning farmers and ranchers starting with the 2015 crop year. The changes announced exempt new farmers from paying the $300 administrative fee for catastrophic policies. New farmers' premium support rates will also increase ten percentage points during their first five years of farming. Beginning farmers will also receive a greater yield adjustment when yields are below 60 percent of the applicable transitional yield. These incentives will be available for most insurance plans in the 2015 crop year and all plans by 2016.

Starting in the fall of 2014, producers who till native sod and plant an annual crop on that land will see reductions in their crop insurance benefits during the first four years. Native sod is acreage that has never been tilled, or land which a producer cannot substantiate has ever been tilled for the production of a crop. The provision applies to acreage in all counties in Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota that is greater than five acres per policy and is producing annual crops.

Additional flexibility for irrigated and non-irrigated enterprise units and coverage levels will be available in the spring of 2015.

The interim rule is available to the public at the Federal Register at www.ofr.gov/inspection.aspx.

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