NAP Noninsured Crop Disaster Assistance Program Introduction Agriculture

NAP Noninsured Crop Disaster Assistance Program

Introduction Agriculture & Business Management 2

What is NAP? Noninsured Crop Disaster Assistance Program • Risk protection Agriculture & Business Management 3

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 Agriculture & Business Management 4

Application of Coverage (Continued) For basic CAT (Catastrophic) coverage The service fee is the lesser of : Ø $250 per crop, Ø $750 per producer per administrative county, not to exceed a total of Ø$1875 for a producer with farming interests in multiple counties. Agriculture & Business Management 5

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 Agriculture & Business Management 6

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. Agriculture & Business Management 7

Statutory Changes Agriculture & Business Management 8

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 Agriculture & Business Management 9

Buy-Up Coverage (Continued) Buy-up coverage levels: Yield Level 50% 55% 60% 65% Agriculture & Business Management Price Level 100% 10

Buy-Up Coverage (Continued) In addition to the service fee, producers who elect buyup 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% of the payment limit • CAP is $125, 000 x 5. 25% or $6563 Agriculture & Business Management 11

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 Agriculture & Business Management 12

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 Agriculture & Business Management 13

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. Agriculture & Business Management 14

Eligible Crops (Continued) Additional eligible crops: Sweet sorghum Biomass sorghum Agriculture & Business Management 15

Eligible Crops (Continued) Expanded definition of industrial crops – includes crops produced as a feedstock for: Renewable biofuel Renewable electricity Bio based products Agriculture & Business Management 16

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) Agriculture & Business Management 17

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 Agriculture & Business Management 18

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 Agriculture & Business Management 19

Limitations and Eligibility $125, 000 payment limitation $900, 000 AGI provision Agriculture & Business Management 20

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 Agriculture & Business Management 21

Eligible Causes of 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. Agriculture & Business Management 22

Damaging Weather Drought Hail Excessive moisture Freeze Tornado Hurricane Excessive wind Agriculture & Business Management 23

Adverse Natural Occurrence Earthquake Flood Volcanic eruption Any combination of the above Agriculture & Business Management 24

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 Agriculture & Business Management 25

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 Agriculture & Business Management 26

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. Agriculture & Business Management 27

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 Agriculture & Business Management 28

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: ◦ 2 T 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. Agriculture & Business Management 29

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. Agriculture & Business Management 30

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 Agriculture & Business Management 31

Questions? ? ? Agriculture & Business Management 32