Introduction 2 2014 Farm Bill NAP Training What is NAP? N oninsured Crop Disaster A ssistance P rogram Risk protection 2014 Farm Bill NAP Training 3

Introduction

22014 Farm Bill NAP Training

What is NAP?

Noninsured Crop Disaster

Assistance

Program

• Risk protection

2014 Farm Bill NAP Training 3

Application of Coverage

• You must make an application for NAP on or before the application closing date for the crop/commodity in the county.


Application of Coverage (Continued)

• Eligible producers must apply for coverage of noninsurable crops using Form CCC-471, “Application for Coverage” and pay the applicable service fee at the FSA office where their farm records are maintained.



For basic CAT coverage• The service fee is the lesser of :

$250 per crop, $750 per producer per administrative county,

not to exceed a total of $1875 for a producer with farming interests in

multiple counties.



• Basic CAT (Catastrophic) level is figured as 50% of the yield and 55% of the price.

Acres x share x (50%) yield x (55%) price


Service Fee & Premium

FSA will waive NAP service fees and reduce buy-up premiums by 50% for:• Beginning farmers (BF)• Limited resource farmers (LR)• Socially disadvantaged farmers (SDA)

The completion of form CCC-860 is required.


Service Fee

FSA will waive NAP service fees for:• Beginning farmers (BF)• Limited resource farmers (LR)• Socially disadvantaged farmers (SDA)



Statutory Changes


Buy-Up Coverage


In addition to CAT-level coverage, NAP will offer buy-up coverage for the 2015 through 2018 crop years

Crops and grasses intended for grazing are excluded from buy-up coverage

Buy-Up Coverage (Continued)

Buy-up coverage levels:


Yield Level Price Level50% 100%55% 100%60% 100%65% 100%


In addition to the service fee, producers who elect buy-up coverage must pay a premium equal to the lesser of:• 5.25% of the guarantee• Guarantee acres x share x yield x coverage

level (yield/price) x price x 5.25%• 5.25% of the payment limit• CAP is $125,000 x 5.25% or $6563



FSA will reduce buy-up premiums by 50% for:• Beginning farmers (BF)• Limited resource farmers (LR)• Socially disadvantaged farmers (SDA)




For value loss crops, buy-up coverage will be based on the maximum dollar value for which the producer requests coverage



If the application closing date for a crop has passed before publication of the NAP rule, producers will have additional time to apply for retroactive buy-up coverage for that crop


Eligible Crops

Any commercial agricultural crop (excluding livestock and their by-products), commodity or acreage of a commodity grown for food or fiber, and commercial or industrial crops for which CAT or additional coverage (non-pilot) is not available.


Eligible Crops (Continued)

Additional eligible crops:• Sweet sorghum• Biomass sorghum



Expanded definition of industrial crops – includes crops produced as a feedstock for:• Renewable biofuel• Renewable electricity• Bio based products



Crops are ineligible if either type of coverage is available under the Federal Crop Insurance Act:• CAT under section 508(b) • Additional coverage under sections 508(c)

and 508(h) (excluding some pilot programs)


Acreage Reporting

Accurate and timely reporting• COF’s will review acreage reporting data with the

producer to verify accuracy• Producers must sign acreage report• Accurate acreage reports ensure program

eligibility• Inaccurate acreage reports can result in loss of

benefits or improper payments• Total cropland report, all cropland on a farm must

be reported to ensure program eligibility2014 Farm Bill NAP Training 21

Acreage Reporting (Continued)

• Acreage reports must be filed by the final acreage reporting date

• Exceptions• If crop is not planted by the final reporting

date the producer has 15 calendar days after planting is completed

• Producer acquires a lease after the final reporting date – producer has 30 calendar days after acquiring the lease to report


Limitations and Eligibility

• $125,000 payment limitation

• $900,000 AGI provision


Notice of Loss

A Notice of Loss should be filed timely.• during the coverage period• within 15 days the loss becomes apparent

Producers of hand harvested crops shall notify COF within 72 hours and file NOL within 15 days of earlier of occurrence or loss becomes apparent


Eligible Causes of Loss

• Loss must occur from an eligible cause of loss during the coverage period before or during harvest

• Eligible causes of loss apply the same to basic and buy-up coverage.


Damaging Weather

• Drought• Hail• Excessive moisture• Freeze• Tornado• Hurricane• Excessive wind


Adverse Natural Occurrence

• Earthquake• Flood• Volcanic eruption• Any combination of the above


Ineligible Causes of Loss

Some examples:• Losses that are not direct result of an

eligible cause of loss in the coverage period• Failure to reseed or replant when

practicable• Failure to follow good farming practices• Water contained or released


Application for Payment

• Producer signs after the loss is filed and worked by an approved loss adjuster

• No later than 60 days after normal harvest date


Production

The production reporting date (PRD) is the later of the acreage reporting date for the crop in the subsequent year or 60 days after the normal harvest date.


Buy-Up Example

• Forage Sorghum– 100 Acres– 2 T Approved Yield– 2014 Price $137.33– 100% share– Not SDA/LR/BF– Selected 60/100 Coverage Level


Buy-Up Example (Continued)

• Premium Calculation– Yield x Coverage Level x Price x Acres x Share =

Guarantee (used only for calculation of premium)

– Guarantee x .0525 = Premium• So:– 2T x .60 x $137.33 x 100 Ac x 100% = $16,480– $16,480 x .0525 = $865 Premium for Buy-Up– The $250 Administrative Fee also applies.



• Harvests 1 ton of Forage Sorghum. There was an eligible cause of loss.– 2 T Yield x 60% coverage level = 1.2 T coverage– 1.2 T coverage – 1 T harvest = .2 T loss– .2 T loss x $137.33 x 100 Ac x 100% share =

$2,747 NAP payment.



• If the same producer selected CAT only:– $250 administrative fee is only cost.

• With the same 1 T harvest:– 1 T coverage (50%) – 1 T harvest = no covered

loss. Zero Payment


Questions???


Documents

Introduction 2 2014 Farm Bill NAP Training What is NAP? N oninsured Crop Disaster A ssistance P rogram Risk protection 2014 Farm Bill NAP Training 3