Time is ripe to purchase crop insurance

Jake Jacobs, University of Vermont RMA Risk Management Education

DEADLINE IS NEAR! The application deadline to purchase crop insurance for spring-planted crops is March 15. In Vermont, this includes corn, forage seeding, sweet corn, soybeans, spring barley and spring wheat. The application deadline for the Whole Farm Revenue Protection Program is also March 15. Find a USDA-licensed agent and talk with your crop insurance agent to make sure you are signed up for the right coverage for your operation.

In the  January 6 posting, you read a little about special crop insurance provisions for new and beginning farmers and ranchers. This time, let’s take a look at NAP.

The Non-Insured Assistance Program (NAP) is another USDA tool available to protect against production losses. Administered by the Farm Service Agency (FSA), NAP covers crops for which traditional insurance is not available, providing financial assistance to participating producers when low yields, loss of inventory, or prevented planting occur due to natural disasters.

Beginning, limited resource and targeted underserved farmers or ranchers are eligible for a waiver of the service fee and a 50 percent premium reduction when they file form CCC-860, “Socially Disadvantaged, Limited Resource and Beginning Farmer or Rancher Certification.” To be eligible for a service fee waiver or premium reduction, the NAP covered producer must qualify as one of the following:

Beginning farmer or rancher – a person or legal entity who:

  • Has not operated a farm or ranch for more than 10 years; and
  • Materially and substantially participates in the operation.

For legal entities to be considered a beginning farmer, all members must be related by blood or marriage and must be beginning farmers.

Limited resource farmer or rancher – a person or legal entity that:

  • Earns no more than $173,600 in each of the two calendar years that precede the complete taxable year before the program year, to be adjusted upwards in later years for inflation; and
  • Has a total household income at or below the national poverty level for a family of four, or less than 50 percent of county median household income for both of the previous two years.

Limited resource producer status may be determined using the USDA Limited Resource Farmer and Rancher Online Self Determination Tool. The automated system calculates and displays adjusted gross farm sales per year and the higher of the national poverty level or county median household income. For legal entities requesting to be considered Limited Resource Farmer or Rancher, the sum of gross sales and household income must be considered for all members.

Targeted underserved farmer or rancher – a farmer or a rancher who is a member of a group whose members have been subject to racial, ethnic or gender prejudice because of their identity as members of a group without regard to their individual qualities. Groups include:

  • American Indians or Alaskan Natives;
  • Asians or Asian Americans;
  • Blacks or African Americans;
  • Native Hawaiians or other Pacific Islanders;
  • Hispanics; and
  • Women.

For legal entities to be considered targeted underserved, the majority interest must be held by targeted underserved individuals.

For more information about NAP, visit your local FSA office or go to their website.  And for more information on risk management and crop insurance, visit the USDA Risk Management Agency and talk with your crop insurance agent.

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About Suzy Hodgson

Suzy works on and writes about issues at the intersections of risk, climate, economics, food, waste, and energy. She is based at UVM Extension's Center for Sustainable Agriculture.
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