Risk Management Agency - INFORMATIONAL MEMORANDUM: R&D-99-023

June 7th, 1999

INFORMATIONAL MEMORANDUM: R&D-99-023

TO:          All Reinsured Companies
             All Risk Management Field Offices

FROM:        Tim B. Witt	/s/ Roberta E. Waggoner (for)
             Deputy Administrator

SUBJECT:     Income Protection Pilot Program for Wheat

BACKGROUND:

The Income Protection (IP) - Wheat pilot program is available in selected counties in Idaho, Kansas, Minnesota, Montana, North Dakota, Oregon, South Dakota, and Washington. The

IP Wheat Crop Provisions, the FCI-35 Coverage and Rate Table format, and the IP Yield Procedure have been updated for the 2000 crop year. The crop provisions were revised to include the following:

Section 6 was modified to show that Roosevelt and Valley Counties, Montana, have been moved from the November 30 filing to the June 30 filing, causing changes in their cancellation, termination, and contract change dates.

2. Section 12 was revised to change the way a claim is settled for catastrophic risk protection coverage.

3. Minor updates were incorporated to make the IP Wheat Crop Provisions consistent with the Basic Provisions and the Small Grains Crop Provisions.

As a result of reinsured company and Risk Management Agency (RMA) requests, the FCI-35 Coverage and Rate Table format and IP Yield Procedure was changed. The FCI-35 Coverage and Rate Table format change provides for a table with less pages per county and shows all coverage levels on one page. The new format was used for the 1999 IP spring wheat, but is a change for the IP winter wheat counties. The IP Yield Procedure was updated to include IP and Indexed IP into one document with yield calculation examples added.

INFORMATIONAL MEMORANDUM: R&D-99-023 2

ACTION:

This release includes the IP Wheat Crop Provisions effective for the 2000 crop year and the updated IP Yield Procedure. These materials are available electronically via the Reporting Organization server.

If you have any questions about this pilot program, please contact Vondie O'Conner at

(816) 926-6343 or by fax at (816) 926-7343.

DISPOSAL:

This Informational Memorandum is for the purpose of transmitting information and the expiration date is March 15, 2001.

Attachments

INCOME PROTECTION (IP) YIELD CALCULATION

AND INDEXED INCOME PROTECTION (IIP) YIELD CALCULATION

This procedure is effective for the 1998 crop year for calculating IP yields and effective for the 1999 crop year for IIP yields.

IP Yields are developed using data from all acreage of the crop in the county for a single unit by practice, type, variety (P/T/V), and FCI - 35 T-Yield map area if applicable. IP Yields are developed on a county enterprise basis. If multiple MPCI units need to be combined, use the procedure contained in the Crop Insurance Handbook, Exhibit 15, paragraph 1C and examples 1 & 2, Combining APH Yield History except that all references to optional units are expanded to include basic units. The following are items that have changed for IP for the 1998 crop year or are specific to the IP Yield and County Average Yield Calculation.

A PRODUCTION REPORTING REQUIREMENTS

Insureds MUST use all previously certified yield history that is still within the base period and have IP Yield(s) calculated.

(1) For the most recent APH crop year in the database, FCIC recommends that insureds complete an APH form for each standard APH unit using standard APH reporting requirements; however, if the producer elects to report total gross production and acreage by P/T/V and T-Yield such production reports are acceptable for IP purposes ONLY. The IP Yield Worksheet (See Figure 15) can be used when several units are being combined to compute the IP yield. Reporting acreage and production for the most recent crop year according to APH procedure provides the insured the opportunity to switch to other crop insurance products without recertifying the production history for the crop year and to qualify for optional units if applicable.

(2) The insured must report and certify ALL planted acres and production for each APH crop year.

(a) For APH crop year(s) previous to the most recent crop year, acreage and production must be reported separately by P/T/V (when indicated on the actuarial table) and by location (legal description) when "T" Yield Map areas are involved.

(b) IP Yield(s) are compiled using the above acreage and production history by P/T/V as specified on the IP Actuarial Table (see examples in Paragraph E this exhibit).

B Transitional Yields.

Four years of records are not required to establish an IP Yield for each P/T/V, or "T" Yield map area. If a P/T/V or "T" Yield map area requiring separate APH yields has less than four years of actual/assigned yields available, the IP T-Yield using standard category B APH procedure for variable T-Yields will be used to complete the database.

C County Average Yield.

The county average yield is based on the average of the county yields from the IP FCI-35 Coverage and Rate Table for years the producer has actual yields reported. If a producer has less than 4 actual yields to compute the IP yield, then the county average yield is the average of the 10 most recent county yields. (Examples of calculating county average yields are shown in Figures 10 and 14.)

D IP YIELD APPLICATION

The approved IP Yield (s)applies to all respective insurable acreage for a practice and type (only practices and types specified on the IP Actuarial Table are applicable). The IP Yield(s) are reported to FCIC as a type 15 record (yield record) for data processing purposes.

E EXAMPLES OF CALCULATING IP YIELDS

The remainder of this exhibit is examples of combining MPCI units into an IP unit, calculating IP yields, calculating county average yields and IP rates.

Example 1 - Calculating an IP Yield from optional units in Map areas. (page 3)

Example 2 - Calculating a County Average Yield and looking up an IP Rate. (Using no T-yields) (page 6)

Example 3 - Calculating a County Average Yield and looking up an IP Rate. (Using T-Yields) (page 7)

Example 4 - Acreage record and Yield Record Example (Type 11 and 15 records) (page 8)

Example 5 - Calculating an IP Yield from APH historical units with practices different from the IP Actuarial Table practices. (page 11)

Example 6 - Indexed IP Yield calculation, rate look up, and electronic record layout - (Page 12)

(1) Example 1 - This example calculates an IP Yield from acreage covered under Map areas. The crop has been grown in two "T" Yield classification areas (Map Area). One P/T/V has been grown in each Map Area. Figures 1-3 are located in Map Area 1.

Figure 1, production reports for farm A, N-Irr Winter indicate two actual yields (one basic unit, standard APH located in section 11).

Figure 1: MPCI Unit 0100, Sec. 11, Map Area 1 N-Irr Winter

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX	4,200	100.0	A42
19XX		0.0	Z
19XX	4,300	100.0	A43
19XX		0.0	Z
			19.
20.Prior Y.		21.Approved APH

Figures 2 and 3, production reports for farm B, N-Irr Winter indicate two actual yields for unit 0201 (standard APH) in section 12 and no actual yields for unit 0202 (standard APH) in section 13.

Figure 2: MPCI Unit 0201, Sec. 12, Map Area 1 N-Irr Winter

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX		0.0	Z
19XX	4,000	100.0	A40
19XX		0.0	Z
19XX	3,520	80.0	A44
			19.
20.Prior Y.		21.Approved APH

Figure 3: MPCI Unit 0202, Sec. 13, Map Area 1 N-Irr Winter

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX		0.0	Z
19XX		0.0	Z
19XX		0.0	Z
19XX		0.0	Z
			19.
20.Prior Y.		21.Approved APH

Figures 4, 5 and 6 are production reports for farm C, Irr Spring which indicate three MPCI optional units (standard APH) located in sections 27, 28, and 36 all within Map Area 2. Unit 0301 does not have any actual yields. Unit 0302 has two actual yields. Unit 0303 has one actual yield.

Figure 4: MPCI Unit 0301, Sec. 27, Map Area 2 Irr Spring

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX		0.0	Z
19XX		0.0	Z
19XX		0.0	Z
19XX		0.0	Z
			19.
20.Prior Y.		21.Approved APH

Figure 5: MPCI Unit 0302, Sec. 28, Map Area 2 Irr Spring

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX	4,000	50.0	A80
19XX		0.0	Z
19XX		0.0	Z
19XX	8,500	100.0	A85
			19.
20.Prior Y.		21.Approved APH

Figure 6: MPCI Unit 0303, Sec. 32, Map Area 2 Irr Spring

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX		0.0	Z
19XX		0.0	Z
19XX		0.0	Z
19XX	1,660	20.0	A83
			19.
20.Prior Y.		21.Approved APH

Figures 7 and 8 are IP summary Yield APH Forms, one for each Map Area, Practice and Type.

Figure 7: IP Yield, Area 1 N-Irr Winter applicable to MPCI Units 0100, 0201, and 0202 (IP UNIT 0100)

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX	4,200	100.0	A42
19XX	4,000	100.0	A40
19XX	4,300	100.0	A43
19XX	3,520	80.0	A44
			19. 169
20(A)PLEM. Y.	42	21.Approved APH Yield

Figure 8, IP Yield, Area 2 N-Irr Spring Applicable to MPCI Units 0301-0303 (IP UNIT 0100)

15.CY.	16.TP.	17.ACRES	18.YIELD
19XX			N75
19XX			N75
19XX	4,000	50.0	A80
19XX		0.0	Z
19XX		0.0	Z
19XX	10,160	120.0	A84
			19. 314
20(A) PLEM.Y.	79	21.Approved APH Yield

The forms are forwarded to the verifier who approves the Summary Yield. A separate IP Yield is required for each "T" yield map area for each practice, type, or variety (requiring separate APH yields) requested.

(2) Example 2 - The following is a rating example using IP Yields calculated in Figure 7 and the sample IP FCI-35 in Figure 11.

The producer's IP yield for Non-Irrigated Winter Wheat is 42 bushels per acre. Assuming the years in the IP Yield Database were the most recent four years (1994-1997), the IP Yield and County Average Yield Calculation are calculated as follows:

Figure 9:

IP YIELD WORKSHEET

STATE: 53 TYPE: 011

COUNTY: 075 PRAC: 003

CROP: 0011 MAP AREA: 001

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

A=ACTUAL

1994 4200 100 42 A 70

1995 4000 100 40 A 53

1996 4300 100 43 A 64

1997 3520 80 44 A 67

IP YIELD 42 COUNTY AVERAGE YLD 64

Based on this calculation and using the IP FCI-35 from Figure 11, the appropriate 75% rate for IP N-Irr Winter Wheat would be 0.088.

(3) Example 3 - The following is an example of calculating a County Average Yield and IP rate using information from Figure 8. (T-yields used)

Figure 10:

IP YIELD WORKSHEET

STATE: 53 TYPE: 012

COUNTY: 075 PRAC: 002

CROP: 0011 MAP AREA: 002

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

1988 69

1989 66

1990 56

1991 77

1992 75 N 53

1993 75 N 56

1994 4000 50 80 A 70

1995 0 0 Z 53

1996 0 0 Z 64

1997 10,160 120 84 A 67

IP YIELD 79 COUNTY AVERAGE YLD 63

Based on this IP Yield and County Average Yield calculation the appropriate rate for IP Irr Spring Wheat would be 0.039. (Note that a 10-year county average yield was used due to the IP Yield Summary having less than 4 actual yield years.)

(4) Example 4 - The Acreage report would be developed the same way it currently is for master yields using two line entries (abbreviated) as follows:

Crop Prac Type Unit Map Area Yield Rate Acres Share

Wheat 003 011 0100 001 42.0 0.088 100.0 1.000

Wheat 002 012 0100 002 79.0 0.039 320.0 1.000

A new producer could submit an APH form for IP by practice/type/variety for the unit (essentially the summary alone) as outlined above. Or the producer could develop the APH using standard APH procedures rolling the APH units into the IP Summary Yield by practice/type/variety.

The IP Yield information is stored electronically in the following data fields:

11 Record - IP yield in Yield Field

County Average Yield in IP County Average Yield Field

15 Record - Acres in Yield Acre # Fields

Summarized Yield in Annual Yield # Fields

Yield type in Yield Type # Fields

IP Yield in Approved Yield Field

County Average Yield calculation:

If more than 3 years of actual years in the 15 record (no t yields), the county average yield is the average of actual yield years' county yields from the FCI-35.

If less than 4 years of actual yields on the 15 record, the county average yield is the average of the most recent 10 years' county yields from the

FCI-35.

Figure 11:

08/12/96 COUNTY ACTUARIAL TABLE PAGE 6

FCI-35 COVERAGE AND RATES

1998 AND SUCCEEDING CROP YEARS

ST: WASHINGTON (53) CO: Whitman (075) CROP: WHEAT (0011)

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

INCOME PROTECTION BASE PREMIUM RATE

---------------------------------------------------------------------------------------------------------------------------------

75% COVERAGE LEVEL

---------------------------------------------------------------------------------------------------------------------------------

COUNTY AVERAGE YIELD

---------------------------------------------------------------------------------------------------------------------------------

PRODUCER | | | | | | | | | |

APH | 0-55 | 56-57 | 58-59 | 60-61 | 62-63 | 64-65 | 66-67 | 68-69 | 70-999|

(BU) | | | | | | | | | |

---------------------------------------------------------------------------------------------------------------------------------

0-25 | 0.048 | 0.102 | 0.125 | 0.138 | 0.183 | 0.219 | 0.259 | 0.304 | 0.474 |

26-30 | 0.033 | 0.069 | 0.085 | 0.095 | 0.127 | 0.153 | 0.182 | 0.215 | 0.350 |

31-35 | 0.027 | 0.056 | 0.070 | 0.077 | 0.103 | 0.124 | 0.149 | 0.176 | 0.290 |

36-40 | 0.023 | 0.047 | 0.058 | 0.064 | 0.086 | 0.103 | 0.123 | 0.146 | 0.242 |

41-45 | 0.021 | 0.041 | 0.050 | 0.055 | 0.073 | 0.088 | 0.104 | 0.124 | 0.204 |

46-50 | 0.019 | 0.037 | 0.044 | 0.049 | 0.064 | 0.076 | 0.090 | 0.106 | 0.174 |

51-55 | 0.017 | 0.033 | 0.039 | 0.043 | 0.056 | 0.066 | 0.078 | 0.092 | 0.149 |

56-60 | 0.017 | 0.030 | 0.036 | 0.039 | 0.051 | 0.060 | 0.070 | 0.081 | 0.131 |

61-65 | 0.016 | 0.029 | 0.034 | 0.037 | 0.047 | 0.054 | 0.063 | 0.073 | 0.116 |

66-70 | 0.016 | 0.027 | 0.032 | 0.035 | 0.043 | 0.050 | 0.058 | 0.067 | 0.105 |

71-75 | 0.016 | 0.026 | 0.031 | 0.033 | 0.041 | 0.047 | 0.054 | 0.062 | 0.095 |

76-80 | 0.016 | 0.026 | 0.030 | 0.032 | 0.039 | 0.045 | 0.051 | 0.058 | 0.087 |

81-85 | 0.016 | 0.025 | 0.029 | 0.031 | 0.038 | 0.043 | 0.048 | 0.055 | 0.081 |

86-90 | 0.016 | 0.025 | 0.028 | 0.030 | 0.036 | 0.041 | 0.046 | 0.052 | 0.076 |

91-95 | 0.016 | 0.024 | 0.027 | 0.029 | 0.035 | 0.039 | 0.044 | 0.049 | 0.071 |

96-999 | 0.016 | 0.024 | 0.027 | 0.029 | 0.034 | 0.038 | 0.042 | 0.047 | 0.066 |

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INCOME PROTECTION COUNTY YIELD TABLE |

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CROP YEAR |

---------------------------------------------------------------------------------------------------------------------------------

1978 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 |

-------------------------------------------------------------------------------------------

36 | 52 | 48 | 52 | 59 | 55 | 75 | 66 | 56 | 63 |

--------------------------------------------------------------------------------------------

1988 | 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 |

--------------------------------------------------------------------------------------------

69 | 66 | 56 | 77 | 53 | 56 | 70 | 53 | 64 | 67 |

--------------------------------------------------------------------------------------------

(5) Example 5 - Calculating the IP Yield Summary from APH units having different practices/types.

This example shows how to compute an IP Yield for practice NPS (no practice specified) and type NTS (no type specified) from historical APH units with SF(summer fallow) and CC (continuous cropping) yields.

Figure 12: MPCI PRACTICE: 004 (CC) TYPE: 997

15.CY. 16.TP. 17.ACRES 18.YIELD

1994 0.0 30T

1995 1,000 20.0 50

1996 1,100 20.0 55

1997 1,000 20.0 50

19.

20.Prior Y. 21.Approved APH

Figure 13: MPCI PRACTICE: 005 (SF) TYPE: 997

15.CY. 16.TP. 17.ACRES 18.YIELD

1994 25N

1995 25N

1996 450 10 45A

1997 400 10 40A

19.

20.Prior Y. 21.Approved APH

Figure 14:

IP YIELD WORKSHEET

STATE: KANSAS TYPE: NTS

COUNTY: ROOKS PRAC: NPS

CROP: 0011 MAP AREA:

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

1988 34

1989 10

1990 37

1991 27

1992 35

1993 16

1994 38 T 38

1995 1000 20 50 A 24

1996 1550 30 52 A 23

1997 1400 30 47 A 33

IP YIELD 47 COUNTY AVERAGE YLD 28

If you wish to use the above worksheet, a copy of a blank form is attached.

(6) Example 6 - The following is an example of calculating an indexed IP yield for a producer with less than four years of actual yields, looking up the indexed IP rate from the FCI-35 Actuarial Table and an abbreviated layout of the indexed IP information stored on the electronic acreage and yield record.

To calculate the Indexed IP yield, you need:

1) The IP yield (as described in Examples 1 - 3)

2) The producer's County Average Yield (Example 3)

3) The expected yield for the county (this is the most recent year's county yield from the actuarial table)

4) The difference between the Producer's County Average Yield and their IP yield.

The formula is:

Expected Yield -(County Average Yield - IP Yield) = Indexed IP Yield

Figure 15.IP AND INDEXED IP YIELD WORKSHEET

STATE: Maryland TYPE: Grain (016)

COUNTY: Allegany PRAC: NI (003)

CROP: CORN MAP AREA:

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

19 99

19 102

19 80

19 104

19 88

19 104

19XX 71 N 102

19XX 71 N 91

19XX 7400 100 74 A 97

19XX 7400 100 102 A 102

IP YIELD 80 COUNTY AVERAGE YLD 97

INDEXED IP YIELD CALCULATION:

County Avg Yield minus IP Yield = Difference

Expected Yield minus Difference(above) = Indexed IP Yield

(From Actuarial Table)

=

The above producer had two years of actual production, so his IP yield was based on two actual yields and two transitional yields (use APH rules). The county average yield was computed using the 10 most recent county average yields from the FCI-35 (Figure 16)Coverage and Rate Table (in cases with 4 or more actual yields available then the county average yield is calculated using the county average yields for just the years which actual yields are reported).

Figure 16.

------------------------------------------------------------------

10/16/1998 COUNTY ACTUARIAL TABLE PAGE 1

FCI-35 COVERAGE AND RATES

1999 AND SUCCEEDING CROP YEARS

ST: MARYLAND (24) CROP: CORN (0041)

CO: Allegany (001) PLAN: Indexed IP (45)

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TYPE: (016) Grain PRAC: (002) Irrigated

(016) Grain (003) Non-Irrigated

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FARM YIELD | PERCENT ELECTIONS | |---------------------------------------------------------------

INTERVALS | 50 | 55 | 60 | 65 | 70 | 75 |

--------------------------------------------------------------------------------------

0- 5 | 0.702 | 0.702 | 0.703 | 0.703 | 0.706 | 0.708 |

6- 13 | 0.608 | 0.611 | 0.615 | 0.618 | 0.623 | 0.626 |

14- 21 | 0.525 | 0.530 | 0.536 | 0.542 | 0.547 | 0.554 |

22- 29 | 0.451 | 0.456 | 0.464 | 0.472 | 0.480 | 0.489 |

30- 37 | 0.389 | 0.396 | 0.405 | 0.413 | 0.423 | 0.433 |

38- 45 | 0.337 | 0.345 | 0.353 | 0.363 | 0.374 | 0.386 |

46- 53 | 0.292 | 0.300 | 0.310 | 0.320 | 0.332 | 0.344 |

54- 61 | 0.252 | 0.260 | 0.271 | 0.282 | 0.293 | 0.307 |

62- 69 | 0.217 | 0.226 | 0.237 | 0.249 | 0.261 | 0.275 |

70- 77 | 0.187 | 0.197 | 0.208 | 0.219 | 0.233 | 0.247 |

78- 85 | 0.158 | 0.169 | 0.180 | 0.192 | 0.206 | 0.221 |

86- 93 | 0.132 | 0.143 | 0.155 | 0.167 | 0.181 | 0.196 |

94-101 | 0.108 | 0.119 | 0.131 | 0.144 | 0.158 | 0.174 |

102-109 | 0.088 | 0.099 | 0.111 | 0.124 | 0.138 | 0.154 |

110-117 | 0.071 | 0.082 | 0.094 | 0.107 | 0.121 | 0.137 |

118-125 | 0.057 | 0.067 | 0.079 | 0.092 | 0.107 | 0.122 |

126-133 | 0.045 | 0.055 | 0.067 | 0.079 | 0.094 | 0.110 |

134-141 | 0.036 | 0.045 | 0.056 | 0.069 | 0.082 | 0.099 |

142-149 | 0.029 | 0.037 | 0.047 | 0.059 | 0.073 | 0.089 |

150-999 | 0.023 | 0.031 | 0.040 | 0.052 | 0.065 | 0.080 |

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: INCOME PROTECTION COUNTY YIELD TABLE |

: TYPE/PRAC | CROP YEAR |

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016/002 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 |

|----------------------------------------------------------------------

| 83 | 82 | 84 | 94 | 77 | 90 | 98 | 88 | 73 | 53 |

|----------------------------------------------------------------------

| 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 |

|----------------------------------------------------------------------

| 99 | 102 | 80 | 104 | 88 | 104 | 102 | 91 | 97 | 102 |

-----------------------------------------------------------------------------------

016/003 | 1979 | 1980 | 1981 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 |

|----------------------------------------------------------------------

| 83 | 82 | 84 | 94 | 77 | 90 | 98 | 88 | 73 | 53 |

|----------------------------------------------------------------------

| 1989 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 |

|----------------------------------------------------------------------

| 99 | 102 | 80 | 104 | 88 | 104 | 102 | 91 | 97 | 102 |

------------------------------------------------------------------------

OPTION/OPTION NAME | OPTION FACTOR TABLE |

----------------------------------------------------------------------

(PF) PREVENTED PLANTING +5% | 1.010 |

(PT) PREVENTED PLANTING +10% | 1.020 |

----------------------------------------

TRANSITIONAL YIELD FACTOR TABLE

FCI-33

TYPE PRACTICE MAP AREA T-YIELD

------------------------------------------------------------------------------------

016 GSG 002 I 79.0

016 GSG 003 NI 79.0

-------------------------------------------------------------------------------------

Using the Indexed Yield of 84 as calculated in Figure 15, and using the actuarial rate table in Figure 16., the appropriate rate at the 65% coverage level for this record would be .192.

The following is an abbreviated example of the acreage information(reported on the type 11 record) and the yield information(reported on the type 15 record) reported for a producer with an indexed yield as computed in Figure 15 which has a 40% share in 50 acres of corn, and 50% share of another 50 acres of corn.

Acreage Record (Type 11) IP County

Plan Crop Type Prac Reported Insured Average

Code Code Code Code Unit Yield Rate Acres Share Yield

45 0041 016 003 0100 84 .192 50 .5 97

45 0041 016 003 0100 84 .192 50 .4 97

Yield Record (Type 15)

Plan Crop Type Prac Approved Yield

Code Code Code Code Unit Yield Index

45 0041 016 003 0100 84 17

If the producer's average yield is greater than the county average yield, the difference between the two is added to the expected county yield. For example using Figure 15, if the producer's IP yield was 100 bushels, the result would be (County average yield minus IP Yield (97 - 100) = - 3) subtracted from the Expected Yield (102 - (-3)) equals 105 bushel Indexed IP Yield.

If you wish to use the Worksheet which includes the indexed yield calculation a copy of a blank form is attached.

IP YIELD WORKSHEET

STATE: TYPE:

COUNTY: PRAC:

CROP: MAP AREA:

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

19

19

19

19

19

19

19

19

19

19

IP YIELD COUNTY AVERAGE YLD

IP AND INDEXED IP YIELD WORKSHEET

STATE: TYPE:

COUNTY: PRAC:

CROP: MAP AREA:

YEAR TOTAL
PRODUCTION
ACRES SUMMARIZED

YIELD
YIELD TYPE COUNTY YIELD

19

19

19

19

19

19

19

19

19

19

IP YIELD COUNTY AVERAGE YLD

INDEXED IP YIELD CALCULATION:

County Avg Yield minus IP Yield = Difference

Expected Yield minus Difference(above) = Indexed IP Yield

(From Actuarial Table)

=

ATTACHMENT
SUMMARY OF CHANGES FOR THE

INCOME PROTECTION - WHEAT CROP PROVISIONS (2000-311)

The following is a brief description of changes to the Income Protection-Wheat crop provisions that will be effective for the 2000 crop year. Please refer to the crop provisions for more complete information. These modifications include, but are not limited to:

(a) Section 1 was revised to include a "Local Market Price" definition.

(b) Section 2 is now the section titled "Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities."

(c) Section 3 is now the section titled "Unit."

(d) Section has been modified to show that Roosevelt and Valley Counties, Montana have been moved from the 11/30 filing to the 6/30 filing, causing changes in their Cancellation, Termination, and Contract Change dates.

(e) Section 12(a) (Settlement of Claim) was revised to change the way a claim is settled for catastrophic risk protection coverage.

2000-311

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

INCOME PROTECTION - WHEAT CROP PROVISIONS

This is a pilot risk management program created by the Federal Crop Insurance Corporation. This risk management tool will be insured under the authority provided by the Federal Crop Insurance Act as amended.

If a conflict exists among the policy provisions, the order of priority is as follows: (1) the Special Provisions; (2) these Crop Provisions; and (3) the Basic Provisions with (1) controlling (2), etc.

1. Definitions

Adequate stand - A population of live plants per unit of acreage which will produce at least the yield used to establish your production amount.

Administrative fee - An amount you must pay for catastrophic risk protection, limited, or additional coverage for each crop year as specified in the Basic Provisions and section 15 of these crop provisions.

Amount of protection - The dollar amount of insurance determined by multiplying the production amount, times the projected price, times the net acres.

Harvest - Combining or threshing the insured wheat for grain or cutting for hay or silage on any acreage. Wheat which is swathed prior to combining is not considered harvested.

Harvest price - The average of the final closing daily settlement prices for the period, exchange, and futures contract specified in the Special Provisions.

Initially planted - The first occurrence of planting the insured crop on insurable acreage for the crop year.

Latest final planting date -

(a) The final planting date for spring-planted acreage in all counties for which the Special Provisions designate a final planting date for spring-planted acreage only;

(b) The final planting date for fall-planted acreage in all counties for which the Special Provisions designate a final planting date for fall-planted acreage only; or

(c) The final planting date for spring-planted acreage in all counties for which the Special Provisions designate final planting dates for both spring-planted and fall-planted acreage.

Local Market Price - The cash grain price per bushel for the U.S. No. 2 grade of wheat offered by buyers in the area in which you normally market wheat. The local market price will reflect the maximum limits of quality deficiencies allowable for the U.S. No. 2 grade of wheat. Factors not associated with grading under the Official United States Standards for Grain, including but not limited to protein, oil or moisture content, or milling quality will not be considered.

Net acres - The planted acreage of the insured wheat crop multiplied by your share.

Nurse crop (companion crop) - A crop planted into the same acreage as another crop, that is intended to be harvested separately, and which is planted to improve growing conditions for the crop with which it is grown.

Planted acreage - In addition to the definition contained in the Basic Provisions, land on which seed is initially spread onto the soil surface by any method and subsequently is mechanically incorporated into the soil in a timely manner and at the proper depth will be considered planted, unless otherwise provided by the Special Provisions, or actuarial documents.

Prevented planting - In lieu of the definition contained in the Basic Provisions, failure to plant the insured crop with proper equipment by the latest final planting date designated in the Special Provisions for the insured crop in the county. You may also be eligible for a prevented planting payment if you failed to plant the insured crop with the proper equipment within the late planting period. You must have been prevented from planting the insured crop due to an insured cause of loss that is general in the surrounding area and that prevents other producers from planting acreage with similar characteristics.

Production amount (per acre) - The number of bushels determined by multiplying the approved actual production history (APH) yield per acre, calculated in accordance with 7 CFR part 400, subpart G, times the coverage level percentage you elect.

Projected price - The average of the final closing daily settlement prices for the period, exchange, and futures contract specified in the Special Provisions.

Sales closing date - In lieu of the definition contained in the Basic Provisions, a date contained in the Special Provisions by which an application must be filed and by which you may change your crop insurance coverage for a crop year. If the Special Provisions provide a sales closing date for both winter and spring types of the insured crop and you plant any insurable acreage of the winter type, you may not change your crop insurance coverage after the sales closing date for the winter type.

Swathed - Severance of the stem and grain head from the ground without removal of the seed from the head and placing into a windrow.

2. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities

(a) In lieu of section 3 of the Basic Provisions, the information necessary to determine the amount of protection will be contained in the Special Provisions or in the actuarial documents. The price at which an indemnity will be determined will be the harvest price.

(b) Catastrophic risk protection provided under 7 CFR part 402 is not available. In lieu of section 3 of the Basic Provisions, producers who elect catastrophic risk protection will receive coverage in accordance with the Catastrophic Risk Protection Coverage section of these provisions.

3. Unit

In lieu of sections 1 and 34 of the Basic Provisions, a unit is all insurable acreage of corn in the county in which you have a share on the date coverage begins for the crop year.

4. Annual Premium

In lieu of section 7(c) of the Basic Provisions, the annual premium amount is determined by multiplying the amount of protection, times the premium rate, times any premium adjustment percentage that may apply.

5. Contract Changes

The contract change date is December 31 preceding the cancellation date for counties with an March 15 cancellation date and June 30 preceding the cancellation date for all other counties (see section 4 of the Basic Provisions).

6. Life of Policy, Cancellation and Termination Dates, and Eligibility

(a) In addition to section 2(a) of the Basic Provisions, these crop provisions are effective beginning the 2000 crop year.

(b) In accordance with section 2 of the Basic Provisions, the cancellation and termination dates are:

Cancellation Termination

State Date Date

Minnesota; Daniels, and

Sheridan Counties, Montana;

North Dakota; and Corson,

Walworth, Edmunds, Faulk,

Spink, Beadle, Kingsbury,

Miner, McCook, Turner, and

Yankton Counties, South Dakota,

and all South Dakota counties

east thereof. March 15 March 15

Kansas September 30 September 30

Idaho; all Montana counties

except Daniels and Sheridan;

Oregon; Perkins, Ziebach,

Dewey, Potter, Hyde, Hand,

Jerauld, Sanborn, Hanson,

Hutchinson, and Bon Homme

Counties, South Dakota, and

all South Dakota counties

west thereof; and Washington.September 30 November 30

(c) Land designated in the actuarial documents as high risk land is not insurable under this policy. You may elect to insure the high risk land under a Catastrophic Risk Protection Endorsement to the MPCI Policy. If both policies are in force, the acreage of the crop covered under the Income Protection Policy will be considered as a separate crop for insurance purposes, including the payment of administrative fees.

7. Insured Crop

(a) In accordance with section 8 of the Basic Provisions, the crop insured will be wheat, that is grown in the county on insurable acreage, and for which premium rates are provided by the actuarial documents:

(1) In which you have a share;

(2) That is planted for harvest as grain; and

(3) That is not:

(i) Interplanted with another crop;

(ii) Planted into an established grass or legume; or

(iii) Planted as a nurse crop, unless planted as a nurse crop for new forage seeding, but only if seeded at a normal rate and intended for harvest as grain.

(b) If you anticipate destroying any acreage prior to harvest you:

(1) May report all planted acreage when you report your acreage for the crop year and specify any acreage to be destroyed as uninsurable acreage. (By doing so, no coverage will be considered to have attached on the specified acreage and no premium will be due for such acreage. If you do not destroy such acreage, you will be subject to the under-reporting provisions contained in section 6 of the Basic Provisions); or

(2) If the actuarial documents provide a reduced premium rate for acreage destroyed by a date designated in the Special Provisions, you may report all planted acreage as insurable when you report your acreage for the crop year. Premium will be due on all the acreage. Your premium amount will be reduced by the amount shown on the actuarial documents for any acreage you destroy prior to a date designated in the Special Provisions if you do not claim an indemnity on such acreage. In accordance with section 14(b) of the Basic Provisions, you must obtain our consent before and give us notice after you destroy any of the insured crop so your acreage report can be revised to make you eligible for this reduction in premium.

8. Insurance Period

In lieu of the requirements under section 11 of the Basic Provisions, the insurance period is as follows:

(a) Insurance attaches on the unit or part thereof on the later of the date we accept your application or the date the insured wheat is planted with the following limitations:

(1) The acreage must be planted on or before the final planting date designated in the Special Provisions for the type (winter or spring) except as allowed in section 13 of these Crop Provisions and the Basic Provisions.

(2) Whenever the Special Provisions designate only a fall final planting date, any acreage of winter wheat damaged before such final planting date, to the extent that growers in the area would normally not further care for the crop, must be replanted to winter wheat unless we agree that replanting is not practical.

(3) Whenever the Special Provisions designate both fall and spring final planting dates, any winter wheat that is damaged before the spring final planting date, to the extent that a majority of the growers in the area would normally not further care for the crop, must be replanted to a winter type of the insured crop unless we agree that replanting is not practical. If it is not practical to replant to a winter type, but it is practical to plant a spring type, you must replant to a spring type. If you have elected coverage under a winter wheat coverage option (if available in the county), insurance will be in accordance with the selected option.

(4) Whenever the Special Provisions designate a spring final planting date any acreage of spring wheat damaged before such final planting date, to the extent that growers in the area would normally not further care for the crop, must be replanted to spring wheat unless we agree that replanting is not practical.

(5) Whenever the Special Provisions designate only a spring final planting date, any acreage of fall planted wheat is not insured unless you request such coverage on or before the spring sales closing date, and we agree in writing that the acreage has an adequate stand in the spring to produce the yield used to determine your production guarantee. Insurance will attach to such acreage on the date we determine that the acreage has an adequate stand. Any acreage of such fall planted wheat that is damaged after it is accepted for insurance but before the spring final planting date to the extent that a majority of producers in the area would normally not further care for the crop must be replanted to a spring type of the insured crop unless we agree that it is not practical to replant. If fall planted acreage is not to be insured it must be recorded on the acreage report as uninsured fall planted acreage.

(b) Insurance ends on each unit at the earliest of:

(1) Total destruction of the insured wheat;

(2) Harvest;

(3) Final adjustment of a loss;

(4) October 31 of the calendar year in which the crop is normally harvested; or

(5) Abandonment of the crop on the unit.

9. Causes of Loss

In addition to the provisions under section 12 of the Basic Provisions, insurance is provided only against a decline in the amount of income due to the following causes of loss which occur within the insurance period:

(a) A decline in the harvest price below the projected price;

(b) Adverse weather conditions;

(c) Fire;

(d) Insects, but not damage due to insufficient or improper application of pest control measures;

(e) Plant disease, but not damage due to insufficient or improper application of disease control measures;

(f) Wildlife;

(g) Earthquake;

(h) Volcanic eruption; or

(I) Failure of the irrigation water supply, if applicable, due to an insured cause of loss specified in sections 9(b) through (h) occurring within the insurance period.

10. Replanting Payments

(a) A replant payment for wheat only is allowed as follows:

(1) You comply with all requirements regarding replanting payments contained under section 13 of the Basic Provisions and in any winter wheat coverage endorsement for which you are eligible and which you have elected;

(2) The wheat must be damaged by an insurable cause of loss to the extent that the remaining stand will not produce at least 90 percent of the production amount for the acreage;

(3) The acreage must have been initially planted to spring wheat in those counties with only a spring final planting date;

(4) The damage must occur after the fall final planting date or the date specified in the Special Provisions in those counties where both a fall and spring final planting date are designated;

(5) Replanting must take place not later than 25 days after the spring final planting date; and

(6) The replanted wheat must be seeded at a rate that is normal for initially planted wheat (if new seed is planted at a reduced seeding rate into a partially damaged stand of wheat, the acreage will not be eligible for a replanting payment).

(b) No replanting payment will be made for acreage initially planted to winter wheat in any county for which the Special Provisions contain only a fall final planting date.

(c) The maximum amount of the replanting payment per acre will be the lesser of 20 percent of the production amount or 3 bushels, multiplied by the projected price, multiplied by your share.

(d) When wheat is replanted using a practice that is uninsurable for an original planting, the liability for the unit will be reduced by the amount of the replanting payment. The premium amount will not be reduced.

11. Duties In The Event of Damage or Loss

(a) In addition to your duties under section 14 of the Basic Provisions, if you initially discover damage to the insured crop within 15 days of, or during harvest, you must leave representative samples of the unharvested crop for our inspection. The samples must be at least 10 feet wide and the entire length of each field in the unit, and must not be harvested or destroyed until the earlier of our inspection or 15 days after harvest of the balance of the unit is completed; and

(b) If your production to count multiplied by the harvest price is less than the amount of protection, you must notify us within 45 days after the date the harvest price is published.

12. Settlement of Claim

(a) In the event of loss or damage covered by this policy, we will settle your claim by:

(1) Multiplying the total production to count (see section 12(b)) by the harvest price, by

(i) For other than catastrophic risk protection coverage, one hundred percent, or

(ii) For catastrophic risk protection coverage, fifty-five percent; and

(2) Subtracting the result of section 12(a)(1) from the amount of protection.

If the result of section 12(a)(2) is greater than zero, an indemnity will be paid to you. If the result of section 12(a)(2) is less than zero, no indemnity will be due.

(b) The total production in bushels to count from all insurable acreage will include your share of:

(1) All appraised production as follows:

(I) Not less than the production amount for acreage:

(A) That is abandoned;

(B) Put to another use without our consent;

(C) Damaged solely by uninsured causes; or

(D) For which you fail to provide records of production that are acceptable to us;

(ii) Production lost due to uninsured causes;

(iii) Unharvested production (mature unharvested production may be adjusted for quality deficiencies and excess moisture in accordance with subsection 12(c));

(iv) Potential production on insured acreage you want to put to another use or you wish to abandon and no longer care for, if you and we agree on the appraised production to count. Upon such agreement the insurance period for that acreage will end if you put the acreage to another use or abandon the crop. If:

(A) Agreement on the appraised production to count is not reached, you may elect to continue to care for the crop, or we will give you consent to put the acreage to another use if you agree to leave intact, and provide sufficient care for, representative samples of the crop in locations acceptable to us. The amount of production to count for such acreage will be based on the harvested production or appraisals from the samples at the time harvest should have occurred. If you do not leave the required samples intact, or you fail to provide sufficient care for the samples, our appraisal made prior to giving you consent to put the acreage to another use will be used to determine the amount of production to count.

(B) You elect to continue to care for the crop, we will determine the amount of production to count for the acreage using the harvested production, or our reappraisal if additional damage occurs and the crop is not harvested.

(2) All harvested production from the insurable acreage.

(c) Mature wheat production may be adjusted for excess moisture and quality deficiencies.

(1) Production will be reduced by .12 percent for each .1 percentage point of moisture in excess of 13.5 percent. We may obtain samples of the production to determine the moisture content.

(2) Production will be eligible for quality adjustment if:

(i) Deficiencies in quality, in accordance with the Official United States Standards for Grain, result in wheat not meeting the grade requirements for U.S. No. 4 (grades U.S. No. 5 or worse) because of test weight, total damaged kernels (excluding heat damage), shrunken or broken kernels, or defects (excluding foreign material and heat damage), or grading garlicky, light smutty, smutty or ergoty; or

(ii) Substances or conditions are present, including mycotoxins, that are identified by the Food and Drug Administration or other public health organizations of the United States as being injurious to human or animal health.

(3) Quality will be a factor in determining your loss only if:

(i) The deficiencies, substances, or conditions resulted from a cause of loss against which insurance is provided under these crop provisions;

(ii) All determinations of these deficiencies, substances, or conditions are made using samples of the production obtained by us or by a disinterested third party approved by us; and

(iii) The samples are analyzed by a grain grader licensed under the authority of the United States Grain Standards Act or the United States Warehouse Act with regard to deficiencies in quality, or by a laboratory approved by us with regard to substances or conditions injurious to human or animal health. Test weight for quality adjustment purposes may be determined by our loss adjustor.

(4) Wheat production that is eligible for quality adjustment, as specified in subsections 12(c)(2) and (3), will be reduced by the quality adjustment factor contained in the Special Provisions.

(d) Any production harvested from plants growing in the insured wheat crop may be counted as wheat production on a weight basis.

13. Late Planting

In lieu of section 16 of the Basic Provisions:

(a) The production amount for each acre planted to the insured crop during the late planting period will be reduced by 1 percent per day for each day planted after the final planting date.

(b) Acreage planted after the late planting period may be insured as follows:

(1) The production amount for each acre planted as specified in this subsection will be determined by multiplying the production amount that is provided for acreage of the insured wheat crop that is timely planted by your prevented planting coverage level percentage (60.0 percent unless you elected a higher prevented planting coverage level percentage specified in the actuarial documents.)

(2) Planting on such acreage must have been prevented by the final planting date (or during the late planting period, if applicable) by an insurable cause occurring within the insurance period for prevented planting coverage; and

(3) All production from acreage as specified in this section will be included as production to count for the unit.

(c) The premium amount for insurable acreage specified in this section will be the same as that for timely planted acreage. If the amount of premium you are required to pay (gross premium less our subsidy) for such acreage exceeds the liability, coverage for those acres will not be provided (no premium will be due and no indemnity will be paid).

(d) Any acreage on which an insured cause of loss is a material factor in preventing completion of planting, as specified in the definition of "planted acreage" (e.g., seed is broadcast on the soil surface but cannot be incorporated), will be considered as acreage planted after the final planting date and the production guarantee will be calculated in accordance with section 13.

14. Prevented Planting

(a) In lieu of sections 17(f)(10), 17(f)(11) and 17(f)(12) of the Basic Provisions, regardless of the number of eligible acres determined in section 17(e) of the Basic Provisions, prevented planting coverage will not be provided for any acreage:

(1) For which you cannot provide proof that you had the inputs available to plant and produce a crop with the expectation of at least producing the yield used to determine the production amount (Evidence that you have previously planted the crop on the unit will be considered adequate proof unless your planting practices or rotational requirements show that the acreage would have remained fallow or been planted to another crop);

(2) Based on an irrigated practice production amount unless adequate irrigation facilities were in place to carry out an irrigated practice on the acreage prior to the insured cause of loss that prevented you from planting. Acreage with an irrigated practice production amount will be limited to the number of acres allowed for that practice under sections 17(e) and (f) of the Basic Provisions and section 14(a) of these crop provisions; or

(3) Based on a crop type that you did not plant, or did not receive a prevented planting insurance guarantee or production amount for, in at least one of the four most recent crop years. Types for which separate projected prices or production amounts are available must be included in your APH database in at least one of the most recent four crop years. We will limit prevented planting payments based on a specific crop type to the number of acres allowed for that crop type as specified in sections 17(e) and (f) of the Basic Provisions and section 14(a) of these crop provisions.

(b) In lieu of section 17(I) of the Basic Provisions the prevented planting payment for any eligible acreage within a unit will be determined by:

(1) Multiplying the production amount per acre for timely planted acreage by the projected price for the wheat crop, by 60 percent (If you have limited or additional levels of coverage, and pay an additional premium, you may increase your prevented planting coverage to a level specified in the actuarial documents);

(2) Multiplying the result of section 14(b)(1) by the number of eligible prevented acres in the unit; and

(3) Multiplying the result of section 14(b)(2) by your share.

(c) In addition to the provisions contained in section 17 of the Basic Provisions, in counties for which the Special Provisions designate a spring final planting date, your prevented planting production amount will be based on your approved yield for spring-planted acreage of the insured crop.

15. Catastrophic Risk Protection Coverage

(a) The Catastrophic Risk Protection Endorsement is not applicable. The following provisions in this section are applicable if you have elected the catastrophic risk protection plan of insurance for any insured acreage.

(b) For the 1999 and subsequent crop years, catastrophic risk protection equals twenty-seven and one-half percent of your approved yield times 100 percent of the projected price.

(c) Administrative Fees

(1) In lieu of section 4, you will not be responsible to pay a premium, nor will the policy be terminated because the premium has not been paid. FCIC will pay a premium subsidy equal to the premium established for this catastrophic risk protection coverage.

(2) In return for catastrophic risk protection coverage, you must pay an administrative fee to us within 30 days after you have been billed (you will be billed by the billing date stated in the Special Provisions);

(i) The administrative fee for each crop in the county is $60.

(ii) Payment of an administrative fee will not be required if you file a bona fide zero acreage report on or before the acreage reporting date for the crop (If you falsely file a zero acreage report you may be subject to criminal and administrative sanctions).

(3) The administrative fee does not apply if it is determined that you meet the definition of a limited resource farmer. If you qualify as a limited resource farmer and desire to be exempted from paying the administrative fee, you must sign the waiver at the time of application (on or before the sales closing date).

(4) If the administrative fee is not paid when due, you, and all persons with an insurable interest in the crop under the same contract, may be ineligible for certain other USDA program benefits as set out in section 15(e), and all such benefits already received for the crop year must be refunded.

(d) Multiple Benefits

If you are eligible to receive an indemnity under this section and benefits compensating you for the same loss under any other USDA program, you must elect the program from which you wish to receive benefits. Only one payment or program benefit is allowed. However, if other USDA program benefits are not available until after you filed a claim for indemnity, you may refund the total amount of the indemnity and then receive the other program benefit. Farm ownership and operating loans may be obtained from the USDA in addition to crop insurance indemnities.

(e) Eligibility for Other USDA Program Benefits

You must obtain at least catastrophic risk protection coverage for each crop of economic significance in the county in which you have an insurable share, if insurance is available in the county for the crop, unless you provide a signed waiver of any eligibility for emergency crop loss assistance in connection with the crop. If you do not obtain catastrophic risk protection coverage or sign the waiver, you will not be eligible for:

(1) Benefits under the Agricultural Market Transition Act;

(2) Loans or any other USDA provided farm credit, including guaranteed and direct farm ownership loans, operating loans, and emergency loans under the Consolidated Farm and Rural Development Act provided after October 13, 1994; and

(3) Benefits under the conservation reserve program derived from any new or amended application or contracts executed after October 13, 1994.

(f) Failure to comply with all provisions of the policy constitutes a breach of contract and may result in ineligibility for the farm program benefits stated in subsection 15(e) for that crop year and any benefit already received must be refunded.

16. Written Agreement

The written agreement provisions of the Basic Provisions are not applicable.

				A=ACTUAL



1994	4200	100	42	A	70
1995	4000	100	40	A	53
1996	4300	100	43	A	64
1997	3520	80	44	A	67

1988					69
1989					66
1990					56
1991					77
1992			75	N	53
1993			75	N	56
1994	4000	50	80	A	70
1995		0	0	Z	53
1996		0	0	Z	64
1997	10,160	120	84	A	67

19					99
19					102
19					80
19					104
19					88
19					104
19XX			71	N	102
19XX			71	N	91
19XX	7400	100	74	A	97
19XX	7400	100	102	A	102