1. Noninsured Crop Disaster Assistance Program

2. Agriculture & Business Management Introduction 2

3. Agriculture & Business Management N oninsured Crop Disaster A ssistance P rogram Risk protection 3

4. Agriculture & Business Management  You must make an application for NAP on or before the application closing date for the crop/commodity in the county.  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 4

5. Agriculture & Business Management For basic CAT (Catastrophic) 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. 5

6. Agriculture & Business Management  Basic CAT level is figured as 50% of the yield and 55% of the price. Acres x share x (50%) yield x (55%) price 6

7. Agriculture & Business Management 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. 7

8. Agriculture & Business Management Statutory Changes 8

9. Agriculture & Business Management 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 9

10. Agriculture & Business Management Buy-up coverage levels: Yield LevelPrice Level 50%100% 55%100% 60%100% 65%100% 10

11. Agriculture & Business Management 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 $6563 11

12. Agriculture & Business Management For value loss crops, buy-up coverage will be based on the maximum dollar value for which the producer requests coverage 12

13. Agriculture & Business Management 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 13

14. Agriculture & Business Management 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. 14

15. Agriculture & Business Management Additional eligible crops:  Sweet sorghum  Biomass sorghum 15

16. Agriculture & Business Management Expanded definition of industrial crops – includes crops produced as a feedstock for:  Renewable biofuel  Renewable electricity  Bio based products 16

17. Agriculture & Business Management 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) 17

18. Agriculture & Business Management 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 18

19. Agriculture & Business Management  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 19

20. Agriculture & Business Management  $125,000 payment limitation  $900,000 AGI provision 20

21. Agriculture & Business Management A Notice of Loss (NOL) should be filed timely. during the coverage period within 15 days that 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 21

22. Agriculture & Business Management  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. 22

23. Agriculture & Business Management  Drought  Hail  Excessive moisture  Freeze  Tornado  Hurricane  Excessive wind 23

24. Agriculture & Business Management  Earthquake  Flood  Volcanic eruption  Any combination of the above 24

25. Agriculture & Business Management 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 25

26. Agriculture & Business Management  Producer signs after the loss is filed and worked by an approved loss adjuster  No later than 60 days after normal harvest date 26

27. Agriculture & Business Management 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. 27

28. Agriculture & Business Management  Forage Sorghum ◦ 100 Acres ◦ 2 T Approved Yield ◦ 2014 Price $137.33 ◦ 100% share ◦ Not SDA/LR/BF ◦ Selected 60/100 Coverage Level 28

29. Agriculture & Business Management  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 $137.33 x 100 Ac x 100% = $16,480 ◦ $16,480 x.0525 = $865 Premium for Buy-Up ◦ The $250 Administrative Fee also applies. 29

30. Agriculture & Business Management  Calculating the Payment  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 $137.33 x 100 Ac x 100% share = $2,747 NAP payment. 30

31. Agriculture & Business Management  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 31

32. Agriculture & Business Management 32