FAQ: I've heard the deadline is September 30, 2010 to sign up for USDA's NAP insurance for forage crops. Can you please tell me a little more about this program?
Answer: Provided by Kevin McClure, program specialist with USDA's Farm Service Agency state office in Des Moines.
The Non-Insured Crop Disaster Assistance Program or NAP provides financial help to a farmer who has crops that are non-insurable by regular commercial crop insurance. NAP policies are purchased from USDA's Farm Service Agency and provide protection should the crop be hit by hail, flooding, wind storms or other natural disasters. A NAP policy covers 50% of the approved yield at 55% of the established price for the crop. The producer must suffer the first 50% of the loss before NAP kicks in.
You have to sign up for NAP insurance each year by a certain deadline date for different crops. For 2011 coverage on "alfalfa" and "mixed grass hay," the NAP sign-up deadline is September 30, 2010. Most spring-seeded crops have a NAP deadline of March 15, 2011. You should remember that regular crop insurance is available on alfalfa in most counties in Iowa.
For example, if hay and forage crops produce a low yield or have a reduction in the amount of acreage due to a disaster such as flooding, the hay and forage crops are eligible for NAP if a policy is in place by the deadline.
If farmers want this insurance protection, they must apply for 2011 NAP coverage using form CCC-471, the Application for Coverage, and pay a service fee at their county FSA office. The service fee is the lesser of $250 per crop or $750 per producer per county, not to exceed a total of $1,875 per producer with a farming interest in multiple counties. If you qualify as a "limited resource" producer, you may request a waiver of service fees.
Q: I signed up for SURE which is USDA's Supplemental Revenue Assistance program—the new disaster program. Do I also need to sign up for NAP?
A: NAP coverage is a requirement for all non-insurable crops in order to qualify for benefits received under the SURE program and to be eligible for Farm Storage Facility Loans from FSA. The SURE program allows you to exclude NAP coverage or crop insurance on crops considered "De Minimis." The De Minimis exception is where a crop or crops within the farming operation provide less than 5% revenue towards the total revenue. Otherwise all crops within the farming operation must be covered by crop insurance and/or NAP in order to be eligible for the SURE program.
If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.
Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.
And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com