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Contact: John Shea, 202-690-0437

PREVENTED PLANTING EXAMPLES - CORN

WASHINGTON, Jun 9, 2008 - Excessive rain has forced many farmers to delay planting crops this spring, which could make insured producers eligible for prevented planting (PP) indemnities.

RMA provides the following guidelines for Federal crop insurance policyholders, who have three insurance options for PP that apply to all Actual Production History (APH), Crop Revenue Coverage (CRC), and Revenue Assurance (RA) insurance policies.

RMA recommends insured producers contact their crop insurance agent before making any decisions regarding PP insurance claims.

Note: Final planting date and late planting period varies by a producer's area and crop.

1. Example 1: Insured producer takes PP payment after the final planting date and does not plant a crop for the year.
   Insured producer selects 75-percent coverage level on insurance policy resulting in $75,000 in total coverage (liability). Multiply $75,000 x 60* percent to get PP payment, $75,000 x 60 percent = $45,000 the insured producer would receive. *Could be different if insured producer has selected a higher level of PP coverage (either plus 5 or 10 percent above base 60 percent available by the sales closing date).
2. Example 2: Insured producer plants corn after the final planting date but before the end of the late planting period (generally a 25-day late planting period available in all corn states) (for example, with a June 5 final planting date, the 25-day late planting period would be June 30).
   Production guarantee or amount of insurance will be reduced 1 percent for each day after June 5 the crop is planted. Example: Insured producer plants corn on June 12. The insured producer planted seven days after the final planting date for corn; thus the production guarantee or amount of insurance is reduced 7 percent. (In dollar terms, $75,000 - $5,250 = $69,750 insurance coverage in effect.)
3. Example 3: Insured producer takes reduced PP payment on corn, plants soybeans no earlier than July 1, and still insures soybeans.
   With the late planting period for corn June 5-30, the producer cannot get PP payment if a crop is planted on land before the end of the late planting period. Producer will be eligible for only 35 percent of PP payment. Producer will also have to accept 10-percent reduction to soybean insurance coverage selection, since July 1 is 10 days after final planting date for soybeans. Finally, a 60-percent actual production history yield for the year on all acres claimed as prevented planting will be recorded for the year.
   
For example, if the insured producer plants soybeans July 1 and collects corn PP payment on acres, then:
• The coverage level is 75 percent with $75,000 worth of coverage (liability),
• Multiply $75,000 by 60 percent to get PP payment ($75,000 x 60 percent = $45,000 PP payment),
• Multiply $45,000 x 35 percent since the insured producer is going to plant another crop, $45,000 x 35 percent = $15,750 the insured producer would receive for corn prevented planting acres,
• Insured producer will also have to accept a yield of 60 percent of APH for the year to be counted as part of their APH. (APH is a 10-year running yield average.) Example - APH is 140 bushels per acre, 140 x 60 percent = 84 bushels per acre recorded for APH that year, and used in calculating APH for future years.

Spotlight: Prevented Planting