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RMA makes crop insurance changes

RMA makes crop insurance changes

Grain sorghum, soybean and sugar beet producers see improved options for coverage.

The U.S. Department of Agriculture announced changes to crop insurance for coarse grains in 2020 and sugar beets in 2020 for some policies and in 2021 for others. USDA’s Risk Management Agency (RMA) made the changes to the policies.

The changes to the course grain options provide producers with more flexibility to choose enterprise units (EUs) or optional units (OUs) by following another crop (FAC) or not following another crop (NFAC) cropping practices in select grain sorghum and soybean counties. The sugar beet changes better protect sugar beet producers who may experience a bumper crop in future years as well as provide other flexibilities.

“We continually listen to producers and other stakeholders in developing our crop insurance policies, and we make adjustments to these policies when necessary,” RMA administrator Martin Barbre said. “With these changes, we believe grain sorghum and soybean producers will have more flexibility.”

These changes are important because:

  • Producers are now able to better manage the unique risks of each practice by having separate FAC and NFAC units.
  • Producers may now be indemnified independently by FAC and NFAC units. A gain on one of the cropping practices will not be offset by the loss on the other cropping practice. 

More than 75 million acres of grain sorghum and soybeans worth a total exceeding $25 billion (liabilities) are covered by crop insurance in 48 states.

Key changes for the sugar beet provisions include:

  • Revising the maximum early harvest adjustment to better reflect a unit’s production capabilities, especially in cases of a sugar beet bumper crop. The rule limits the adjustment to a yield no greater than the producer’s approved actual production history (APH) yield or actual yield after full maturity. Previously, the adjustment was limited to the unit’s approved APH yield, and producers voiced concern that it may penalize them by failing to recognize the upward trend in sugar beet yields.
  • Adding procedures to allow third-party testing of sugar beets for raw sugar content, in addition to processors. This gives producers greater flexibility in obtaining raw sugar content tests.
  • Adding a procedure to determine whether damaged sugar beet production has or does not have salvage value.
  • Changing the deadline for producers to provide a copy of the production agreement to the acreage reporting date (instead of the time of loss). This facilitates a faster determination by the insurance provider of proper acreage and liability coverage.
  • Removing the requirement to include a price, or formula for a price, in the production agreement based on third-party data. This better reflects that there is no third-party data source for prices and that not all production agreements include a price.

These changes take effect for crop year 2020 with policies that have a contract change date of Nov. 30, 2019. They take effect in all other counties beginning in the 2021 crop year. Crop years reflect the normal growing season and are identified by the year of harvest.

More than 1 million acres of sugar beets worth a total of more than $980 million in liabilities are covered by crop insurance in California, Colorado, Idaho, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oregon, South Dakota, Washington and Wyoming.

Changes are further described in a final rule that is now available on the Federal Register at regulations.gov. Interested parties are invited to comment on the rule for 60 days.

Source: USDA RMA.

TAGS: Policy
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