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NATIONAL CROP INSURANCE SERVICES
7201 West 129th Street, Suite 200
Overland Park, KS 66213
FOR IMMEDIATE RELEASE
For 12 Northeastern States: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and West Virginia.
For more information contact Jan Eliassen at 410-778-0120
USDA announces extra incentive to get crop insurance
Spring deadline is March 15
USDA's Risk Management Agency (RMA) has announced an additional $5 million of incentive, up to 15 percent of the farmer paid premium, for all 2005 crop year buy-up policies in 15 states, including the 12 Northeastern states.
The 15 percent would be applied to the farmer's premium costs that remain after the federal premium subsidy.
The incentive is skewed towards the higher levels of coverage to encourage buying up. Beginning at .05 percent at the 50 percent buy-up option, it moves to .10 percent at the 55 percent coverage choice and jumps to .15 percent at 70 percent coverage and up.
RMA data on a sampling of states recently demonstrated that most of the indemnities paid on crop insurance claims go to those at 70 percent or higher. Thirty percent losses, or less, are far more common than 50 percent losses.
The premium rates for each level of coverage are set with the expectation that losses will equal gross premiums. At approximately a 50 percent subsidy, on average, producers should receive loss payments of about two times the long-term cost of premiums. But most of that goes to those at 70 percent or higher.
Policies not eligible for this financial assistance include all catastrophic (CAT) policies, the Livestock Risk Protection (LRP) policies, and Livestock Gross Margin (LGM) plans.
Producers of spring planted crops wishing to take advantage have until March 15 to sign up for crop insurance or to make any changes to existing policies. If you do not wish to make any changes to your existing policies, the financial assistance will be automatically applied to your premium costs for 2005.
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