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Risk Management AgencyRisk Management Services Division

Monday, January 20, 2003

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What’s New At RMA

RMA VISION

We serve America’s agricultural producers through effective, market-based risk

management solutions.

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What’s New At RMA

RMA MISSION

Promote, support, and regulate sound risk management solutions to strengthen and

preserve the economic stability of America’s agricultural producers.

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What’s New At RMA

STRATEGIC GOALS

• Widely available and effective risk management solutions

• A fair and effective delivery system

• Informed stakeholders

• Program integrity

• Excellent service

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What’s New At RMARMA Values

• Integrity• Professionalism• Quality• Service• Adaptability

• Diversity• Respect• Stewardship• Teamwork• Communication

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What’s New at RMA• $3.1 B + Paid in 2002 Indemnities (as of 1/12/03)• $18.5 M Awarded in Partnership Grants (12/2002)• Prevented Planting Forum• Crop Insurance Handbook (Procedural) Issues

Workshop• New Program Development• Failure of American Growers Insurance Company

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2002 Indemnities

National - $3,147,409,209 Paid on 215,732,212 Acres

Minnesota - $109,178,691 Paid on 16,276,724 Acres

North Dakota - $315,171,096 Paid on 19,562,724 Acres

South Dakota - $320,911,467 Paid on 12,394,168 Acres

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Partnership Grants

• Authorized by ARPA• Announced in December 2002• Complete list on RMA Website:

http://www.rma.usda.gov/news/2002/11/educationtable.html

• Some organizations: Montana State University, Montana Grain Growers Assn. ND Grain Growers Assn., MN Assn. Of Wheat Growers

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Prevented Planting Forum

Recent droughts have identified weaknesses in current prevented planting coverage

RMA will be evaluating its current prevented planting rules

Crop insurance industry and commodity groups will participate

First meeting held January 14, 2003

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Prevented Planting Insurance

Must provide meaningful coverage to insured’s

Must provide certainty for both companies and insured’s

Must be simple to administer Must be actuarially sound

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Prevented Planting Insurance

• Same policy provisions in effect for 2003

• New Basic Provisions Expected for 2004

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• Held January 16-17

• Industry & RMA Participants

Discuss for 2004:

All County application/election

Combining & Dividing APH Yield History

Added Land Deadlines for Underwriting Review

RMA Yield Determinations

Maximum Yield Edits

CIH Procedural Issues Workgroup

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ARPA Created New Era for Risk Management Programs

508(h) Products $65 Million over a 5 year period

Contracted Product $110 Million over a 5 year period

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508(h) Products Submission Regulation 7 CFR 400 Subpart V

Products submitted first 5 business days of Jan., April, July, or Oct.

120 days for Board to Approve or Disapprove

Once approved it is released for all SRA holders use

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Types of 508(h) Products

Crop Revenue Coverage (CRC) Revenue Assurance (RA) Group Risk Income Protection (GRIP) Livestock Gross Margin (LGM)

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Types of 508(h) Products

Livestock Risk Protection (LRP) – 2002 Hybrid Seed Price Endorsement (IL, IN, IA,

MI, MN, NE, SD and WI) – 2002 Best Management Practices (IA, MN, PA

and WI) - 2003

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The Board may Approve a Submissionif it Determines

Interests of producers are protected Rates are actuarially appropriate Submission conforms to sound insurance

and underwriting principles Associated risks are appropriate

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Failure of American Growers Insurance Company

• NE Dept. of Insurance & RMA Working Together

• Commitment to Pay Producers On Time

• Agent’s Commissions Are Being Paid

• MGR-02-022 Issued Regarding the Transfer of Policies

• Watch RMA Website for Updates

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2003 Quality Adjustment

MGR-02-020 – Clarification of Quality Adjustment Loss Provisions:

Reinsured companies must reject any quality determinations that are not based on grading standards in the respective Crop Provisions.

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2003 FM & Dockage

MGR-02-017 – Claims Advisory – Dockage

Issued August 20, 2002

Dockage & FM MAY be deducted if damage is result of insured peril.

Not intended to include elevator charges.

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Adjusted Gross Revenue

Pilot Program

Uses Producer’s Schedule F

AGR-Lite Developed by PA Dept. of Ag.

Farm Bill of 2002 Required Expansion into 8 Additional Counties in CA & PA

AND WE DID!

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Thank You

For further information, please visit the Risk Management Agency web site:

www.rma.usda.gov