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Contact: John Shea, 202-690-0437

FIRST AND SECOND CROP RULES

WASHINGTON, Jul 1, 2008 - Recent flooding in the Midwest has many producers trying to make the best decision regarding insured acreage for the rest of the crop year. RMA lists here its policies regarding failed crops and prevented planting.

RMA is providing this general overview of how the first crop/second crop rules apply under the Federal Crop Insurance program. All policy requirements must be met to be eligible for an insurance payment.

Example 1: First Insured Crop is Prevented from Being Planted*

1. No second crop** planted ' full prevented planting payment on first insured crop.

2. Plant and hay or graze a cover crop on or after November 1 ' full prevented planting payment on first insured crop.

3. Plant a second crop or hay or graze a cover crop*** after late planting period for first insured crop but before November 1 - 65 percent reduction in prevented planting payment (insured producer will also have to accept a yield of 60 percent of actual production history (APH) for the year to be counted as part of their APH).

Example 2: First Insured Crop Planted and Failed

1. If not practical to replant first insured crop:

A. Not plant a second crop, or plant and not insure second crop - full indemnity for first insured crop

B. Plant and insure a second crop ' 65 percent reduction in indemnity for first insured crop ' and producer pays 35 percent of the premium for the first insured crop

C. If no loss on second crop, receive remaining 65 percent of indemnity on first insured crop and pay full premium on first insured crop

D. If second crop receives indemnity (producer choice), first crop indemnity remains at 35 percent ' second crop indemnity is fully paid (no reduction).

2. If practical to replant first insured crop and it is not replanted, no coverage for the first insured crop is provided.

3. If practical to replant and first insured crop is replanted receive a replanting payment and the first insured crop remains insured at the full chosen coverage level guarantee.

*Prevented planting coverage available for most crops, but not available for group risk protection policies.

**FCI-Act defines "second crop" as an "agricultural commodity," which includes a wide variety of crops including forage crops, native grasses, and tame hay. A cover crop harvested, hayed or grazed is considered a "second crop" unless hayed or grazed after November 1 which is a 'leniency' or benefit for producers so they may obtain some value from it.

***Cover Crop - A crop generally recognized by agricultural experts as agronomically sound for the area for erosion control or other purposes related to conservation or soil improvement. A cover crop may be considered to be a second crop (see the definition of 'second crop' in the policy provisions).

Spotlight: Prevented Planting