In 2012, farmers can get more crop insurance coverage for less

As crop insurance purchase deadlines approach for the majority of the Corn Belt on March 15, the National Corn Growers Association urges farmers to explore how changes in policies can make coverage more affordable. With lower insurance premiums being offered for most coverage levels this year and adjustments to historical-yield trend calculations, many growers can take advantage of lower rates and increases in coverage.

“At NCGA, we constantly strive to improve the safety net for farmers and hope that in 2012 many will take advantage of the improved options that we have achieved,” said Garry Niemeyer, NCGA President. “We faced difficult weather conditions across much of the Corn Belt in 2010 and again in 2011. By reexamining crop insurance options, many growers may find that increased coverage is more affordable and will better guard against losses in 2012.”

Lower premiums are the result of adjustments that the Risk Management Agency made based on updated crop insurance actuarial data and partial implementation of proposed changes to the program’s rating methodology.

Augmenting the effect of this adjustment, farmers in many areas are also benefiting from an additional change in the addition of the Trend-Adjusted Actual Production History (APH) Yield Endorsement option. This option allows producers with qualifying APH databases in eligible counties to chose to have their APH yield, used to determine crop insurance guarantee coverage, adjusted based on their county’s historical yield trend.

“Our office has done numerous quotes for producers the last six weeks. We have seen that producers are often able to lower their coverage level with comparable or higher revenue guarantees,” said Doug Tenney, with Leist Mercantile in Circleville. “It would appear that those producers who previously had enterprise crop units at the 80% level can buy enterprise at the 75% level and often will have comparable or better coverage, while paying less per acre. Crop insurance rates per acre are heavily subsidized at the 75% level. Not always is this the case, but it bears doing some comparison pricing with your crop insurance agent. Note that we are discussing generalities. Trend adjustment coverage is not for everyone, nor are enterprise units the catchall coverage to use. The bottom line is that you should consult with a professional agent who understands your operation and farming practices.”

 

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