1 Risk Management Agency Risk Management Services Division Monday, January 20, 2003

2 What’s New At RMA RMA VISION We serve America’s agricultural producers through effective, market-based risk management solutions.

3 What’s New At RMA RMA MISSION Promote, support, and regulate sound risk management solutions to strengthen and preserve the economic stability of America’s agricultural producers.

4 What’s New At RMA STRATEGIC GOALS Widely available and effective risk management solutions A fair and effective delivery system Informed stakeholders Program integrity Excellent service

5 What’s New At RMA RMA Values Integrity Professionalism Quality Service Adaptability Diversity Respect Stewardship Teamwork Communication

6 What’s New at RMA $3.1 B + Paid in 2002 Indemnities (as of 1/12/03) $18.5 M Awarded in Partnership Grants (12/2002) Prevented Planting Forum Crop Insurance Handbook (Procedural) Issues Workshop New Program Development Failure of American Growers Insurance Company

Indemnities National - $3,147,409,209 Paid on 215,732,212 Acres Minnesota - $109,178,691 Paid on 16,276,724 Acres North Dakota - $315,171,096 Paid on 19,562,724 Acres South Dakota - $320,911,467 Paid on 12,394,168 Acres

8 Partnership Grants Authorized by ARPA Announced in December 2002 Complete list on RMA Website: table.html table.html Some organizations: Montana State University, Montana Grain Growers Assn. ND Grain Growers Assn., MN Assn. Of Wheat Growers

9 Prevented Planting Forum  Recent droughts have identified weaknesses in current prevented planting coverage  RMA will be evaluating its current prevented planting rules  Crop insurance industry and commodity groups will participate  First meeting held January 14, 2003

10 Prevented Planting Insurance  Must provide meaningful coverage to insured’s  Must provide certainty for both companies and insured’s  Must be simple to administer  Must be actuarially sound

11 Prevented Planting Insurance Same policy provisions in effect for 2003 New Basic Provisions Expected for 2004

12 Held January Industry & RMA Participants Discuss for 2004: All County application/election Combining & Dividing APH Yield History Added Land Deadlines for Underwriting Review RMA Yield Determinations Maximum Yield Edits CIH Procedural Issues Workgroup

13 ARPA Created New Era for Risk Management Programs  508(h) Products  $65 Million over a 5 year period  Contracted Product  $110 Million over a 5 year period

14 508(h) Products  Submission Regulation 7 CFR 400 Subpart V  Products submitted first 5 business days of Jan., April, July, or Oct.  120 days for Board to Approve or Disapprove  Once approved it is released for all SRA holders use

15 Types of 508(h) Products  Crop Revenue Coverage (CRC)  Revenue Assurance (RA)  Group Risk Income Protection (GRIP)  Livestock Gross Margin (LGM)

16 Types of 508(h) Products  Livestock Risk Protection (LRP) – 2002  Hybrid Seed Price Endorsement (IL, IN, IA, MI, MN, NE, SD and WI) – 2002  Best Management Practices (IA, MN, PA and WI)

17 The Board may Approve a Submission if it Determines  Interests of producers are protected  Rates are actuarially appropriate  Submission conforms to sound insurance and underwriting principles  Associated risks are appropriate

18 Failure of American Growers Insurance Company NE Dept. of Insurance & RMA Working Together Commitment to Pay Producers On Time Agent’s Commissions Are Being Paid MGR Issued Regarding the Transfer of Policies Watch RMA Website for Updates

Quality Adjustment MGR – Clarification of Quality Adjustment Loss Provisions: Reinsured companies must reject any quality determinations that are not based on grading standards in the respective Crop Provisions.

FM & Dockage MGR – Claims Advisory – Dockage Issued August 20, 2002 Dockage & FM MAY be deducted if damage is result of insured peril. Not intended to include elevator charges.

21 Adjusted Gross Revenue Pilot Program Uses Producer’s Schedule F AGR-Lite Developed by PA Dept. of Ag. Farm Bill of 2002 Required Expansion into 8 Additional Counties in CA & PA AND WE DID!

22 Thank You  For further information, please visit the Risk Management Agency web site: