AG INSURANCE

Farmers hope for Mother Nature’s cooperation, but they count on insurance being there when bad weather strikes.

Whether it is too dry, too wet, too hot, too cold, or if the elements produce hail or tornadoes, farmers can recoup some of their losses through insuring various aspects of their farming and ranching operations.

Farm Credit Services of America, based in Omaha, serves farmers and ranchers in Nebraska, Iowa, South Dakota and Wyoming.

It is part of the Farm Credit System, a nationwide agricultural network that provides credit and affiliated services to farm and ranch operators across the United States.

According to its Web site, the Farm Credit System supplies the nation’s agricultural industry with nearly one-third of its credit needs.

Farm Credit Services of America is part of the Farm Credit System, a $140 billion nationwide network of lending institutions, chartered in 1917.

The Association operates on a cooperative basis.

Farm Credit Services of America is owned by its more than 70,000 customers and is governed by a 17-member board of directors. The customer-owners of the Association elect 14 directors — three directors are appointed by the board.

Unlike commercial banks, Farm Credit institutions do not take deposits. Instead, money is raised by selling systemwide bonds on Wall Street. The proceeds are then channeled through Farm Credit banks and Associations to agricultural producers and cooperatives. Because of the market acceptance and attractiveness of Farm Credit securities and the volume of funds raised, Farm Credit Services of America is able to offer competitive interest rates and unlimited amounts of capital to the agricultural sector.

Farm Credit Services of America has a network of 42 retail offices in four states.

Just about every crop is insurable.

According to Wayne Vontz, vice president insurance, based out of McCook, crop insurance is a federal program. The state really doesn't administer crop insurance, however they oversee the companies and agents to make sure they are financially responsible and that they are following the rules the state has for writing insurance business in Nebraska.

“The Feds subsidize the program for the farmer,” he said. “Example is at the 70 percent level of crop insurance the farmer pays 41 percent of the actual premium and the federal government subsidizes the balance of 59 percent. It is different for each level of coverage. The Feds also oversee company and agent activity.

“They audit (review) a percent of claims each year and also audit (review) a percent of Production Reports that the farmer submits every year. They oversee the entire program to make sure that fraudulent reporting of production or fraudulent claims are not happening, in order to maintain the integrity of the crop insurance program. They write the Provisions (rules for the crop insurance plans of coverage) for each crop and practice that must be followed by companies, agents, adjusters and farmers,” Vontz said.

These are just a few of their duties, he said.

There are several products offered:

Multi-peril crop insurance, crop revenue coverage, revenue assurance with harvest price option and group risk plan.

Here is a look at what each product offers:

Multi-Peril Crop Insurance (MPCI)

- Actual Production History Plan.

- Covers most unavoidable production losses.

- Federal Crop Insurance Corporation (FCIC) determined price.

- Stated amount of yield guarantee without revenue protection.

Crop Revenue Coverage (CRC)

- Revenue guarantee is calculated with the higher of base or harvest price.

- Price for corn, soybeans and grain sorghum is determined by the Chicago Board of Trade.

- Price for winter wheat is determined by the Kansas City Board of Trade.

- Maximum upward price movement protection is 200 percent.

- Calculated Revenue for insurance purposes is NOT determined by the price that you sell your crop.

Revenue Assurance (RA) with Harvest Price Option

- Very similar to CRC.

- Maximum upward price movement protection is 200 percent.

- The harvest price is determined for corn during November for the December contract.

Group Risk Plan (GRP)

- Based on county average.

- Production guarantees and losses on county basis.

- One unit per county.

- Less paperwork.

CROP INSURANCE

PRODUCTS

Group Risk Income

Protection (GRIP)

- Production guarantees and losses are determined by a combination of county yields and Board of Trade prices.

- Maximum upward price movement protection is 200 percent.

- One unit per county.

- Less paperwork.

Crop Hail Insurance

- Protects against damage due to hail, fire and lightning.

- Insures against damage occurring during transit or storage.

- Provides replanting coverage.

- The dollar amount of coverage per acre is selected by the grower.

MPCI is available to all producers regardless of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status.

n Crop hail (this protection is not part of the crop insurance program and is not federally subsidized.