No Insurance on Fall-seeded Crops – No SURE Aid

Insurance is now mandatory to get disaster coverage on next year's crops.

Published on: Aug 15, 2008

Farm Progress editors were tipped off last week about a key provision in the new Farm Bill's fine print. And this week, state ag officials were being to sound off the warning:

To be eligible for disaster assistance on 2009 summer crops, you must have crop insurance coverage – on all insurable fall-planted crops. That means signing up before the September 30 deadline for winter wheat, barley, oats, rye and forage production. For apples, pears and grapes, the deadline is November 20. For potatoes, it's December 31.

The new Farm Bill requires crop insurance, on every acre of any insurable crop, or Noninsured Assistance Program coverage on all acres of uninsurable crops, clarifies Jan Eliassen, consultant for USDA's Risk Management Agency. That's if you want to be eligible for 2009 disaster aid on next year's insured crops.

Disaster aid under the new Supplemental Revenue Assistance Program has changed the rules. Unfortunately, "SURE's new rules haven't been published yet," he adds.

"So the safest advice seems to be: If a crop is insurable in your county, insure every acre of it. If it's not insurable, but the Noninsured Assistance Program is available, then sign up for NAP. If you have questions about crops not falling into either category, check with your local Farm Service Agency office."

The SURE shift

SURE will be based on whole farm revenue. So the more crop insurance coverage you have, the more your guarantee will be.

It will also be available to any farm where total calendar year weather-related losses are greater than 50% of normal production. The guarantee is 115% times the crop insurance price election times the crop insurance coverage level times the adjusted crop insurance yield.

Art Barnaby, Kansas State University ag economist notes that ad hoc disaster aid used to be based on 65% coverage regardless of their crop insurance coverage. That included the minimum Catastrophic coverage. Aid was also based on individual crops by county.

"SURE is a whole farm revenue guarantee, based on crop insurance coverage selected by farmers. Those selecting CAT coverage will have their SURE coverage based on 50% coverage at the 55% price. Farmers insuring at the 75% level will have their SURE disaster aid based on 75% coverage at 100% of the price election," he explains.

According to Barnaby, there are two limits on the SURE payments.

1) The per farm SURE cap equals 90% of expected revenue. Whole farm revenue plus SURE payments can't exceed 90% times planted acres times adjusted actual production history yield (used to set crop insurance yields) times "insurance price guarantee".

The price is expected to be the national average USDA price for the marketing year that follows. So there'll be a long wait for a SURE payment compared to when crop insurance loss payments are received.

2) SURE has a maximum payment amount of $100,000. Most farmers will have a $200,000 payment limit because a spouse also qualifies for a $100,000 payment limit.

If you have any questions, contact a crop insurance agent well before the deadline, urges Elliasen.