Jay Waechter, Senior Risk Management Specialist Topeka Regional Office Regional Update Jay Waechter, Senior Risk Management Specialist Topeka Regional Office

This presentation does not replace or supersede any procedures or modify any provisions contained in the complete insurance policies. Note: Much of the content provided in this presentation has not been filed as of this date and is subject to change.

2013 Changes

Region-wide changes Wheat T-Yields were updated Grain Sorghum T-Yields updated and Rates were reviewed Corn and Soybeans Rates were reviewed I’ll show some slides on the T-Yield changes as we get into each state’s individual changes. Rate changes have not been finalized at this time.

2013 Proposed Double Crop Statements and FAC/NFAC Key Criteria in Development of 2013 Statements/Definitions: Local conditions, notably length of season and soil moisture, primary drivers in setting restrictions. Continue to rely on university/other research and experience Increase flexibility in 2013 for haying and grazing of ‘another crop’ and/or cover crop, based on guidance in recent Manager’s Bulletins Key Proposed Changes in Kansas, Nebraska & Colorado: Allow harvesting of “another crop” and “cover crop” Except for West, allow more springtime growth of cover crops. Define “termination” There have been quite a few questions that have come up since MGR -12-012 and MGR- 12-012.1 were released. This bulletin announced that RMA would file SP statements to allow haying or grazing of cover crops without impacting the insurability of planted 2013 spring crops. I’ll explain how this was done in our double crop statements that are filed for NI crops. We also made changes to the FAC and NFAC definitions, but since we only have those practices in eastern KS and MO, I’ve tucked those slides under the KS part of the presentation. 12.1 also stated that RMA will publish an SP statement to allow haying or grazing of cover crops with out impacting potential prevented planting payments. That statement has not been provided by the time this presentation was prepared.

2013 Proposed Double Crop Statements Key changes from 2012 are bolded (additions) or red strikeout (deletions) South Central/Eastern Kansas Insurance shall not attach or be considered to have attached without a written agreement to a planted non-irrigated crop on acreage from which, in the same calendar year: 1) A perennial hay crop was harvested; or 2) A crop (other than a cover crop) reached the headed or budded stage prior to termination, regardless of the percentage of plants that reach the headed or budded stage, or has been harvested; 3) A cover crop is terminated after 50% of the cover crop has headed or budded.   For purposes of insurability under this Special Provision, a cover crop is one that meets the definition of a cover crop in the Basic Provisions and was planted within the last 12 months. Termination means growth has ended. To qualify for a written agreement, you must provide a minimum of three years of your double cropping actual production history for the crop in the county. This is an example of the statement that would be used where we accept requests for WA to insure double cropped Soybeans and Grain Sorghum. In this higher rain fall area we allow for a crop or cover crop to be harvested and for the cover crop to go until the 50% headed or budded stage.

2013 Proposed Double Crop Statements Key changes from 2012 are bolded (additions) or red strikeout (deletions) Eastern Kansas, Eastern Nebraska Insurance shall not attach or be considered to have attached to a planted non-irrigated crop on acreage from which, in the same calendar year: 1) A perennial hay crop was harvested; or A crop (other than a cover crop) reached the headed or budded stage prior to termination, regardless of the percentage of plants that reach the headed or budded stage, or has been harvested; A cover crop is terminated after 50% of the cover crop has headed or budded. (Definition of cover crop, termination) This is the statement that is used in the rest of KS, NE and CO where a WA request would not be accepted for double cropping soybeans or grain sorghum. Notice in the eastern more precipitation areas we would allow again the cover crop to reach the 50% headed or budded stage. Western Kansas. Western Nebraska, Colorado: Insurance shall not attach or be considered to have attached to a planted non-irrigated crop on acreage from which, in the same calendar year:  1) A perennial hay crop was harvested; or A crop, including a cover crop, reached the headed or budded stage prior to termination, regardless of the percentage of plants that reach the headed or budded stage, or has been harvested; . (Definition of cover crop, termination)

Double Crop Statements Corn West – No Written Agreements East – No Written Agreements

Double Crop Statements Soybeans FAC / NFAC West – No Written Agreements East – No Written Agreements Written Agreements allowed

Double Crop Statements Grain Sorghum West – No Written Agreements East – No Written Agreements Written Agreements allowed

Cover Crops and Summer Fallow To qualify for the SF practice, the acreage must not have been planted to a crop the preceding crop year and remain fallow for a full crop year. Planting a cover crop during the fallow period affects the insurability of your next wheat crop. If a crop was planted on acreage qualifying as summer fallow the preceding crop year but was terminated by JUNE 1, and any later growth is controlled by mechanical or chemical means, the acreage will qualify as summer fallow the next crop year. Please see our FAQ at: http://www.rma.usda.gov/help/faq/summerfallow.html The point here is that the SF definition in the special provisions and in the CIHB is two fold. The ground must lie fallow for a full crop year and a good SF practice must be started by 6/1. Planting a cover crop during the fallow period will affect insurability as a SF practice since a crop is planted and growing during the fallow period. Ground that already qualifies as SF and for some reason does not get planted to anything other than a cover and the cover is terminated by June 1 would then continue to qualify for SF the next crop year. Same as our current failed crop provisions outlined in the CIHB.

New Breaking For the second year in a row a new statement will be added to the actuarial for Corn, Grain Sorghum and Soybeans The biggest change will be that in most cases the AIP will approve coverage without a Written Agreement The only cases that will now come to the RO will be when the acreage limitation, date of breaking or, soil criteria are not met The statement will be very similar however there are some very important changes. The biggest is that the Special Provisions Statement will now act much like an extension of the Basic Provisions Section 9. If the producer meets the criteria in the statement the AIP Will approve insurability. The request can not be sent to the RO! Last year it was an option and the requests could still be sent to the RO, this is no longer the case.

New Breaking – Corn, Soybeans, Grain Sorghum Through a new statement in the Special Provisions the AIP can approve without Written Agreement if: 75% of the acreage by field is composed of soil types defined as Capability Class I, II, III, or IV. NRCS Web Soil Survey http://websoilsurvey.nrcs.usda.gov/app/HomePage.htm ; and The land must have been broken/ chemically sprayed… Either Prior to Planting or On or before November 30 prior to planting (Depending on the county); and The first criteria that has to be met is that the soils must be at least 75% class I, II, III or IV. The second criteria is that the land must be broken either by the time of planting in the east, or before 11/30 prior to planting in the west. See the next two maps for which counties will have to meet the appropriate criteria. This puts all of Colorado in the 11/30 break out date.

Corn, Soybeans, and Grain Sorghum only

November 30

New Breaking is insurable without a Written Agreement if: (Continued) The producer provides a NRCS Conservation Plan, if required by NRCS; and The newly broken acreage is <320 acres; and If any of the above requirements are not met, this land will be insurable only by Written Agreement. Any new breaking acreage (on a whole field basis) that exceeds the 320 acres requires a written agreement. Only the acreage that exceeds 320 acres requires a written agreement. Up to 320 acres may be approved under the Special Provisions statement. Certifications are OK on NRCS Conservation Plans. The acreage limitation has moved up from 160 to 320. Also the AIP can take up to 320 before the rest would have to come to the RMA RO.

New Breaking – Corn, Soybeans, Grain Sorghum MGR-12-017 sets in place new rules for acreage converted to cropland: Provide insurance for new breaking acreage at 80 percent of the applicable published county T-Yield in the actuarial documents without a written agreement if the producer and acreage meets all requirements of the Special Provisions statement, including providing documentation that the new breaking acreage has previously been broken and planted to a crop in the past This is already out and will be part of the special provision statement.

New Breaking – Corn, Soybeans, Grain Sorghum MGR-12-017 sets in place new rules for acreage converted to cropland: Provide insurance for new breaking acreage at 65 percent of the applicable published county T-Yield in the actuarial documents without a written agreement if the producer cannot provide documentation that the new breaking acreage has been previously broken and planted to a crop in the past, however, the producer does meet all other requirements of the Special Provisions statement This is already out and will be part of the special provision statement. So last year if the ground had not been cropped prior a request had to come to the RMA RO. For 2013 the AIP will approve and provide 65% of T.

New Breaking - Documenting land was previously cropped What cannot be used: The producer certification on the request it was cropped.  Just because the requested ground is terraced is not considered documentation. What can be used: The previous crop year’s FSA 578 showing the land as cropland, or A FSA 578 showing the prior crop the new breaking acreage was planted to. Everything else is up in the air until we see it.  Andrew suggested custom planting or custom harvest records that show the field or old insurance records for the field as possibilities

New Breaking MGR-12-017 sets in place new rules for acreage converted to cropland: New breaking T-Yields established by RMA Regional Office written agreements will be limited to a maximum of 80 percent of the applicable published county T-Yield. Variable T-Yield percentages do not apply to new breaking T-Yields assigned by RMA Regional Office written agreement. This action item will begin with crops that are eligible for new breaking written agreements and have sales closing dates after September 30, 2012 Remove the requirement to apply variable T-Yield percentages to the resulting new breaking T-Yield This impacts all crops as general procedure, nor just the Corn, Grs and Soybean counties that have the SP statement. Anything that has to come to the RMA RO starting in 2013 will be capped at 80% of T. Good news, there is also specific language that the variable T-Yield procedure will not apply on top of the new breaking T-Yield. This set up situations last year where new producers that were given 65% of T because they could not document the land had been cropped in prior years were then given 65% of the already 65% of T based on normal variable yield procedures.

New Breaking Remember these rules that were in place for 2012 and remain in place for 2013: Disallow simple average T-Yields and new producer T-Yields Require establishment of a separate APH database in the initial crop year the new breaking acreage is insured; and Disallow prevented planting coverage in the initial year the new breaking acreage is broken out for planting

Yield Trend For 2013 Available on Corn, Soybeans (KS & NE only) and Wheat (KS & NE only) Could possibly see expansion to other crops

Trend Adjustment Option Wheat *Trend Adjustment Option May not be available on all Practices

Trend Adjustment Option Wheat *Trend Adjustment Option May not be available on all Practices

Pasture Rangeland and Forage Cancellation and Sales Closing date is now November 15th Nebraska will be covered under the Rainfall Index Removed requirement to divide total insured acres by index interval and replaced with allocating a percentage of value to each index interval. Changed the Contract Change Date to 8/31 Removed ability to adjust acreage

Pasture, Rangeland & Forage Vegetative & Rain Index June/Aug & July/Aug Intervals Red Shading indicates a Final Index Value that could have triggered an indemnity payment, depending upon the Level of coverage selected on a policy. Green Shade indicates a Final Index Value that will not trigger an indemnity payment. FINAL INDEX VALUES

Pasture, Rangeland & Forage Vegetative Index June/Aug Interval Red Shading indicates a Final Index Value that could have triggered an indemnity payment, depending upon the Level of coverage selected on a policy. Green Shade indicates a Final Index Value that will not trigger an indemnity payment. FINAL INDEX VALUES

Pasture, Rangeland & Forage Rain Index July/Aug Interval Red Shading indicates a Final Index Value that could have triggered an indemnity payment, depending upon the Level of coverage selected on a policy. Green Shade indicates a Final Index Value that will not trigger an indemnity payment. FINAL INDEX VALUES

Program Deletions Wheat GRP, GRIP, GRIP-HRO programs have been removed Refer to MGR-12-018, these are the program deletions for 2013. Wheat GRP, GRIP, GRIP-HRO programs have been removed

Onions 14(d) of the onion policy states: If the damage to harvested or un-harvested onion production exceeds the percentage shown in the Special Provisions for the type, no production will be counted for that unit or portion of a unit unless such damaged onion production from that acreage is sold. Policy Change required an update to references of the New Policy The percent Damage has been updated from 40% to 50%. The percent of damage referenced in section 14(d) of the Onion Crop Provisions will be 50 percent.

High-Risk Alternative Coverage Endorsement (HR-ACE) Provides insureds an opportunity to insure high-risk land on a separate additional coverage policy with coverage greater then CAT but less than the coverage on the base policy 508(h) submission, AIPs are not required to offer Must elect the endorsement by the sales closing date Eligible crops are corn, soybeans, grain sorghum and wheat in the following counties Similar to the current High Risk Exclusion option but, this allows a producer to exclude the high risk land from the base policy and insure the high risk land under a lesser coverage policy but higher than CAT. See the actual Endorsement, the Standards Handbook and FAQ’s on RMA’s website under Crop Policies and Pilots.

High Risk Alt Coverage Option Available in Counties with Insurance offers applicable to High Risk Maps

Breached Levees Land flooded due to a breach in a levee resulting from prior year(s) flooding is insurable. The applicable rate will be assigned based on conditions of the levee and soils on the latter of the sales closing date or earliest planting date. If, by that date, the levee has not been repaired to prior specifications, or if damaged soil (if any) has not been restored to at least the same crop yield potential as prior to the flood event, the land will be classified as high risk and will have the highest rate classification in the county. However, if the levee has been repaired to prior specifications and the soil has at least the same crop yield potential as before the flood, the land will be classified as shown on the current crop year Actuarial Map This statement will be removed from the following counties: Nebraska: Nemaha Kansas: Leavenworth, Wyandotte In the 2011 flood, levees in these counties were breached that impacted the high risk land rating for the 2012 crop year. The levees have been repaired and the statements removed for 2013.

Breached Levee Statements From 2011 Flood In the 2011 flood, levees in these counties were breached that impacted the high risk land rating for the 2012 crop year. The levees have been repaired and the statements removed for 2013. Removed

Colorado

Colorado 6/30 Map Changes Updated Map Incorporated a HR classification change. Lincoln Co. Updated Map

Colorado 11/30 Map Changes Updated Map Incorporated a HR classification change. Lincoln County. Updated Map

Colorado Summary of Changes Reviewed and updated T-Yields for Wheat and Grain Sorghum

Transitional Yields Changes Wheat – Irrigated T-Yields for the most part based on 10 years of Policy data. 2001 through 2010. PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Continuous Crop PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Cont. Crop PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Winter Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Winter Wheat – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Nebraska

Nebraska Summary of Changes Program Expansion: Potato program Lincoln County

New T-Locater Maps These counties have had high risk maps in place for the sand hills ground since the 1980’s. Since our corn T-Yields have gotten higher over the last few years we were getting complaints that the T-Yield was getting higher than the production potential in the BBB area. These are also the only map changes for Nebraska. T-yields Reduced to 85% for High Risk Areas on Irrigated Corn Counties in NE Brown Rock Holt Current Tyield 175 168 181 Factor 0.85 New Tyield 149 143 154

Nebraska Summary of Changes Reviewed and updated T-Yields for Wheat and Grain Sorghum

Transitional Yields Changes Winter Wheat – Cont. Crop T-Yields for the most part based on 10 years of Policy data. 2001 through 2010. PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Winter Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Winter Wheat – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Cont. Crop PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Spring Wheat – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Cont. Crop PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Kansas

Kansas Summary of Change Dates Acreage Reporting Date changed to 12/15 for fall wheat and barley In the USDA initiative to combine acreage reporting dates, the KS date change from 11/15 to 12/15.

Kansas Summary of Change The FAC and NFAC statements have been updated again for 2012 to modify the cover crop language for soybeans.

2013 Proposed FAC/NFAC Definitions Key changes from 2012 are bolded (additions) or red strikeout (deletions) Southeastern corner of Kansas: FAC (Following Another Crop): A planted crop following: 1) A perennial hay crop that was harvested in the same calendar year; or 2) A crop (other than a cover crop) that has reached the headed or budded stage prior to termination, regardless of the percentage of plants that reached the headed or budded stage, and/or has been harvested in same cal. year; and 3) A cover crop that was terminated after 50% of the cover crop has headed or budded. Definitions of FAC and NFAC updated to incorporate the same cover crop language as the other non-irrigated crop programs we already have talked about today. NFAC (Not Following Another Crop): A planted crop not following: 1) A perennial hay crop that was harvested in the same calendar year; and A crop (other than a cover crop) that has reached the headed or budded stage prior to termination, regardless of the percentage of plants that reached the headed or budded stage; and/or has been harvested in same cal. year; and 3) A cover crop that was terminated after 50% of the cover crop has headed or budded.

Double Crop Statements Soybeans FAC / NFAC West – No Written Agreements East – No Written Agreements Written Agreements allowed

Kansas 6/30 Map Changes Updated Map HR land incorporated into the actuarial. Meade county. Updated Map

Kansas 11/30 Map Changes Updated Map HR land incorporated into the actuarial. Meade and Cowley counties. Updated Map

Limited Irrigation Proposal

Section 9(b) 0f the Common Crop Insurance Policy you must report as irrigated only that acreage for which you have adequate facilities and adequate water, or the reasonable expectation of receiving adequate water at the time coverage begins, to carry out a good irrigation practice. If you knew or had reason to know that your water may be reduced before coverage begins, no reasonable expectation exists. The Loss Adjustment Manual goes one step further and states “or will be reduced or cut off during the irrigation season, have no reasonable expectation of adequate irrigation water”

Currently this gives the producer the following options: Reduce planting to only those acres that have adequate water and facilities to produce the APH Approved Yield. For the remaining acres: Plant and report as non-irrigated; or If an insurable event during the prevented planting insurance period causes a reduction in available irrigation water supply, the producer may report and receive a prevented planting guarantee on the qualifying acres. These are the options without having the possibility to spread the water in a limited irrigation situation.

Potential for Insuring Limited Irrigation Can plant all acreage with less than full supply of water Would require an adjustment of the APH yield Basis of adjustment must be able to be consistently applied regardless of insurance company Use collaborative work of irrigation experts at KSU, UNL, and CSU

Where We Are Now RMA is in the process of contracting a study to look at the feasibility of offering a limited irrigation program For 2013 the Topeka RO is offering a limited irrigation practice in parts of Sheridan and Thomas counties in KS Special Provisions of Insurance Statements will be placed in these two counties. The result will be that the Topeka RO will entertain requests for limited irrigation coverage under a Type Practice type of written agreement The written agreement will assign a Yield for limited irrigation

Limited Irrigation Practice Kansas – Irrigated Corn & Soybeans THOMAS SHERIDAN Map of the Local Enhanced Management Area the limited irrigation Pilot will be offered in. LEMA HPA Area SD-6 (As of Oct. 11th, 2012)

Special Provisions Statement If you intend to apply less irrigation water than was used to establish your irrigated approved APH yield and you are in a Local Enhanced Management Area (LEMA), you may qualify for a written agreement to establish coverage for a limited irrigation practice.  In addition to providing the minimum supporting documentation for a type/practice written agreement, you must also provide:   Your LEMA order from the Chief Engineer or delegate to apply less irrigation water within a five year period than historically used to support your irrigation practice; Your historical water use for each unit or APH data base for which a limited irrigation practice yield is requested.  Water use records must be provided for at least the most recent 4 years of APH yields to be considered. Acceptable water use records include your annual water use reports, as recorded on the State’s Water Right Information System (WRIS) or the water right file in the Division of Water Resource’s Stockton office and must be expressed in gross acre inches; Your intended maximum level of irrigation for the current year, in gross acre-inches;  Your type of irrigation system (Center Pivot, Improved Gravity, or Gravity); and Any other pertinent information to establish the distribution of irrigation water from a point of diversion to multiple fields, if applicable.  The request for written agreement and all supporting documentation must be submitted to the Regional Office through your crop insurance agent on or before the acreage reporting date.  The following site provides additional information that may be useful in making the request to the Regional Office:  http://www.rma.usda.gov/aboutrma/fields/ks_rso/ This is tentatively what will be filed in the two counties in KS. This spells out the required documentation the producer will have to provide to get approval for a limited irrigation written agreement.

Documentation tool which will be available on the Topeka RO website to help agents and producers document the historical water use and intended irrigation amount for the current crop year.

Kansas Summary of Change Reviewed and updated T-Yields for Wheat Cotton and Grain Sorghum

Transitional Yields Changes Wheat – Irrigated T-Yields for the most part based on 10 years of Policy data. 2001 through 2010. PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Cont. Crop PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Wheat – Summer Fallow PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Cotton – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Cotton – Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Non-Irrigated PERCENT CHANGE IN T-YIELDS

Transitional Yields Changes Grain Sorghum – Irrigated PERCENT CHANGE IN T-YIELDS

Thank You Rebecca Davis, Director Topeka Regional Office 2641 SW Wanamaker Rd Suite 201 Topeka, KS 66614 Phone: (785) 228-5512 Fax: (785) 228-1456 Email: rsoks@rma.usda.gov