by John Berry, Extension Educator, Lehigh County
Crop insurance has become the risk-management tool of choice
for many farmers, because it works. The program was created to ensure that the
private sector would help shoulder part of agriculture’s risk.
Crop insurance not only prevents taxpayers from shouldering
the full burden of a farm disaster, but also gets payments to farmers relatively
quickly. Mother Nature does not just strike large crop farms and a
crop-insurance indemnity does not make a farmer or rancher ‘whole’ any more
than a check from an insurance company replaces a house lost in a tornado.
However, the AGR and AGR-Lite insurance products are intended to benefit the
diverse and sometimes modest sized farms on the east coast.
Crop insurance is a public-private partnership, designed to
ensure that when disaster strikes, the private sector – crop insurance companies
– are there to help shoulder the risk and the financial burden of
rebuilding. Crop insurance policies are
purchased by the farmer and suited to the farmer’s needs, comfort with risk and
financial situation.
USDA’s Risk Management Agency (RMA) recently announced the
Adjusted Gross Revenue (AGR) insurance for farmers and ranchers is again being
offered for 2014. The application deadline is January 31, 2014. Current AGR policyholders also have until
January 31, 2014, to make any changes to existing contracts. AGR provides whole farm income protection
under an umbrella-type policy that covers income from all crops and some
livestock, provided the income from livestock and livestock products does not
exceed 35 percent of total farm income.
Unlike traditional crop insurance guarantees based on
yields, AGR provides a guarantee against a significant decline in overall farm
income from the average of the most recent five years (2008 – 2012). As a result of substantial premium subsidies
provided by the USDA, AGR can be a very affordable way to guarantee an income
flow from your farm operation.
In addition, a similar product called AGR-Lite, which crops
and covers livestock and has a limitation of $1,000,000 in coverage. AGR-Lite is available in almost all counties
for the states listed above for 2014.
The sales closing date for new AGR-Lite contracts is March 15,
2014. Current AGR-Lite policyholders
also have until January 31, 2014, to make any changes to existing
contracts.
Farmers are strongly urged to contact a local crop insurance
agent, as soon as possible, for more information and premium quotes for both
products. For a list of crop insurance
agents, farmers may contact their local USDA Farm Service Agency office or log
on to the following Risk Management Agency web site: http://www3.rma.usda.gov/tools/agents/