Introduction Farm Bill NAP Training

What is NAP? N oninsured Crop Disaster A ssistance P rogram Risk protection 2014 Farm Bill NAP Training 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 Farm Bill NAP Training 4

Application of Coverage (Continued) 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 Farm Bill NAP Training 5

Application of Coverage (Continued) For basic CAT coverage The service fee is the lesser of :  $250 per crop,  $750 per producer per administrative county, not to exceed a total of  $1875 for a producer with farming interests in multiple counties Farm Bill NAP Training 6

Application of Coverage (Continued) Basic CAT (Catastrophic) level is figured as 50% of the yield and 55% of the price. Acres x share x (50%) yield x (55%) price 2014 Farm Bill NAP Training 7

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 Farm Bill NAP Training 8

Service Fee FSA will waive NAP service fees for: Beginning farmers (BF) Limited resource farmers (LR) Socially disadvantaged farmers (SDA) The completion of form CCC-860 is required Farm Bill NAP Training 9

Statutory Changes Farm Bill NAP Training

Buy-Up Coverage 2014 Farm Bill NAP Training 11 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

Buy-Up Coverage (Continued) Buy-up coverage levels: Farm Bill NAP Training Yield LevelPrice Level 50%100% 55%100% 60%100% 65%100%

Buy-Up Coverage (Continued) In addition to the service fee, producers who elect buy-up 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% 5.25% of the payment limit CAP is $125,000 x 5.25% or $ Farm Bill NAP Training 13

Buy-Up Coverage (Continued) FSA will 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 Farm Bill NAP Training 14

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 2014 Farm Bill NAP Training 15

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 2014 Farm Bill NAP Training 16

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 Farm Bill NAP Training 17

Eligible Crops (Continued) Additional eligible crops: Sweet sorghum Biomass sorghum 2014 Farm Bill NAP Training 18

Eligible Crops (Continued) Expanded definition of industrial crops – includes crops produced as a feedstock for: Renewable biofuel Renewable electricity Bio based products 2014 Farm Bill NAP Training 19

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) 2014 Farm Bill NAP Training 20

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 2014 Farm Bill NAP Training 21

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 2014 Farm Bill NAP Training 22

Limitationsand Eligibility $125,000 payment limitation $900,000 AGI provision 2014 Farm Bill NAP Training 23

Notice of Loss A Notice of Loss should be filed timely. during the coverage period within 15 days the 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 2014 Farm Bill NAP Training 24

Eligible Causes of Loss 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 Farm Bill NAP Training 25

Damaging Weather Drought Hail Excessive moisture Freeze Tornado Hurricane Excessive wind 2014 Farm Bill NAP Training 26

Adverse Natural Occurrence Earthquake Flood Volcanic eruption Any combination of the above 2014 Farm Bill NAP Training 27

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 2014 Farm Bill NAP Training 28

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 2014 Farm Bill NAP Training 29

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 Farm Bill NAP Training 30

Buy-Up Example Forage Sorghum – 100 Acres – 2 T Approved Yield – 2014 Price $ – 100% share – Not SDA/LR/BF – Selected 60/100 Coverage Level 2014 Farm Bill NAP Training 31

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: – 2T x.60 x $ x 100 Ac x 100% = $16,480 – $16,480 x.0525 = $865 Premium for Buy-Up – The $250 Administrative Fee also applies Farm Bill NAP Training 32

Buy-Up Example (Continued) 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 $ x 100 Ac x 100% share = $2,747 NAP payment Farm Bill NAP Training 33

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 2014 Farm Bill NAP Training 34

Questions??? 2014 Farm Bill NAP Training 35