The frequent rains that have soaked Iowa this year have left many corn and soybean fields unplanted or with flooded areas. Many producers are wondering what options they have under their multiple peril crop insurance (MPCI) policies.
Q What should a producer do if their planted crops are affected by the flooding?
A Notify their crop insurance agent within 72 hours of the loss. If they qualify, the replant option provides a payment reflecting 8 bushels of corn or 3 bushels of soybeans per acre times the projected price of $5.65 per bushel corn and $12.87 per bushel soybeans, respectively. So replant will provide about $45 per acre for corn and over $38 per acre for soybeans in 2013.
Q Isn't there a 20-20 rule for coverage?
A Yes, to qualify for an indemnity payment under the replanted, delayed or prevented planting provisions, a minimum area of 20 acres or 20 percent of the insured unit, whichever is smaller, must be affected.
A unit could be a field or a farm - if you elected an optional whole farm or basic unit. An enterprise unit could also have been elected. This choice reflects the insured's corn acres combined in a particular county to determine loss or their soybean acres.
Q I chose enterprise units to save on premium. Can I now change to basic or optional units because flooding has damaged my planted crop acreage?
A Because unit structure impacts the premium cost, and in the case of enterprise units, also the premium subsidy, the policyholder's decision to elect enterprise units is made no later than the sales closing date to reflect the binding contractual agreement between the two parties on or before March 15, 2013. Changing the enterprise unit structure would be a contractual violation between the approved insurance providers and the policyholder, and leave the government vulnerable to a breach of contract. Therefore, any change to the contract at this time shifts risk to approved insurance providers from previously negotiated financial commitments within the terms and conditions of the Standard Reinsurance Agreement.
Q If I am physically unable to get to a field for planting am I covered by prevented planting?
A Prevented planting payments can be made if an insured cause of loss resulted in there being NO way into a field that otherwise could be planted. These types of cases are expected to be very limited. If there is ANY way into the field, even if it means the producer has to drive out of the way to reach the acreage, then the producer would be expected to do so if the field was dry enough to plant. Prevented planting payments would not be made if there was any access to the acreage. Producers, however, are not expected to go to extreme measures like airlifting equipment into a field.
Q If I am prevented from planting by the final planting date, what are my choices under the terms of my policy provided I meet all other policy provisions and I do not qualify for double cropping?
A You may:
·Plant the insured crop during the late planting period, if applicable, and insurance coverage will be provided. The late planting period is generally 25 days after the final planting date but varies by crop and area. For most crops, the production guarantee is reduced 1 percent per day for each day planting is delayed after the final planting date.
· Plant the insured crop after the late planting period (or after the final planting date if a late planting period is not applicable), and insurance coverage will be provided. The insurance guarantee will be the same as the insurance guarantee provided for prevented planting coverage.
· Leave the acreage idle (black dirt) and receive a full prevented planting payment.
· Plant a cover crop and receive a full prevented planting payment provided the cover crop is not hayed or grazed before Nov. 1, or otherwise harvested at any time. If the cover crop is hayed or grazed before Nov. 1, the prevented planting payment on the first crop is reduced to 35 percent of the first crop prevented planting guarantee.
· Plant another crop (second crop) after the late planting period, or after the final planting date if no late planting period is applicable, and receive a prevented planting payment equal to 35 percent of the prevented planting guarantee.
Q If my first insured crop was planted and failed, what are my choices under the terms of my policy provided I meet all other policy provisions and I do not qualify for double cropping?
A Several choices under what is called first crop-second crop coverage.
1. If it is not practical to replant the first insured crop: