Crop insurance: What are the preventative plant rules?

By Chris Bruynis, Assistant Professor & Extension Educator; Greg Schiefer, Scheifer Farm and Family Insurance; and Marlene McCreary, Farmers Mutual Insurance

With the weather forecasters calling for more wet weather, farmers are starting to think about the preventative planting provisions in their crop insurance policies. Although most crop insurance policies have some preventative plant provision, neither GRP nor GRIP policies have preventative plant coverage, so check with your agent. One good thing is that farmers have choices and do not have to rush into any decisions but need to be aware of their options before getting to busy in the field. The target date for corn to be planted is June 5 and farmers can either take preventative planting, switch to another crop, or still plant corn with a reduction in coverage.

Claiming preventative planting probably will not be the first choice in 2011 because many farmers have already locked in favorable contract prices for their corn and will need to plant some corn to fulfill those obligations. But if farmers choose to take preventative plant they will need either 20% or 20 acres of a unit (whichever is smaller) to have not been planted this year. Example: a farmer has 400 acres of corn insured, 20% of 400 would be 80 acres and since 20 acres is smaller, there would need to be at least 20 acres of preventative plant in order to file a claim.

The maximum numbers of acres that a farmer can claim is equal to or less than the highest number of acres of that crop planted in the past 4 growing seasons less the acres planted this year. Example: a farmer had 380 acres in 2007, 120 acres in 2008, 400 in 2009, and 340 acres in 2010 of corn. This year he is able to plant 200 acres of corn. He can claim 200 acres of preventative plant (400 acres is the greatest number of acres planted in the past 4 years less 200 acres he planted this year).

If preventative plant is chosen the farmer’s historical average will not be harmed. You will be eligible for 60% of your guarantee per acre. However if preventative plant is chosen and you plan to follow with another crop in 2011, you will have to wait until the end of the late plant period for corn (July 1) and your prevented plant claim would be reduced to 35% of your coverage and only 35% of your premium would be due. A production of 60% of your corn’s historical average will be recorded reducing your historical averages. If the farmer plants soybeans after the preventative plant date expires, he will also need insured the soybeans, however it will result in a reduced coverage as July 1 is 11 days into the late plant period for beans. A preventative plant claim must be filed within 72 hours of the final plant date, which is June 5 for corn and June 20 for soybeans or within the late plant period for the crop. Basically, the claim should be filed as soon as the decision is made not to plant a crop on the affected acres after the final plant date has passed for the crop.

The second option and probably the most common is simply switching to another crop. Here in Ohio, most farmers will switch those preventative plant acres to soybeans. This will be influenced by many factors including contracted corn bushels, herbicides already applied, availability of soybean seed, market price of soybeans and planting date.

The third option is to simply wait it out and plant corn after the June 5 preventative planting date. The late planting window that opens after June 5 allows for corn to be planted but with a reduction in coverage level. Each day after June 5 will result in the affected acres being reduced by 1% of your chosen coverage levels. Example: if a 50-acre field did not get planted until June 10 then the coverage will be reduced on those acres by 5%. If a farmer purchases coverage that would result in a $600 payment per acre, the premium will remain unchanged and the coverage would become $570 per acre in this scenario. If a farmer chooses this option and then cannot plant corn he can still file a preventative plant claim as long as it is still within the late plant period (until July 1).

This is just a summary and it is not meant to substitute for the actual Multi-Peril Crop Insurance provisions. Farmers wanting to explore their options should contact their insurance agent for specific rules associated with their insurance coverage.

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