Next year, agency will combine insurance policies

By MATTHEW WEAVER

Capital Press

The USDA Risk Management Agency recently announced harvest prices for 2010 crop insurance coverage.

The harvest price is used to calculate revenue for producers who purchased a 2010 crop year Crop Revenue Coverage, Income Protection or Revenue Assurance Plan policy.

For wheat under the Crop Revenue Coverage plan and Income Protection plan, the harvest price is $6.29 per bushel. The projected price last spring was $5.55.

Most farmers buy CRC, Dave Paul, the agency's regional director, said. With that type of policy, as the price increases, so does coverage.

"If you had a loss of production this year, you got more coverage than you had when you bought the insurance policy at the beginning of the year," he said. "It's almost like a replacement cost feature, in some respects. If you lose bushels, the policy will compensate you at the current value price."

The Income Protection plan does not have that upside protection. Few of those policies are sold as a result, Paul said.

Barley under the Income Protection plan is $3.30 per bushel. Feed barley under the Revenue Assurance Plan is $3.36 per bushel.

Under the Revenue Assurance Plan, in Idaho only, spring wheat harvest price is $7.08 per bushel, up from $5.43 last year, and winter wheat is $5.16 per bushel, down from $5.29 last year.

The bulk of Idaho business is also Crop Revenue Coverage, Paul said.

This is the last year for the separate insurance policies. Next year, the agency will combine the insurance plans into a single policy.

"It's kind of the beauty of the combo policy," Paul said. "It's going to take all of these features and mold them into one insurance plan. In the future, we won't have to announce three different sets of prices."

The harvest price is multiplied by the appraised or harvest production to determine the calculated revenue. The calculated revenue is then subtracted from the final revenue guarantee to determine possible insurance losses.

Paul recommends producers with a production loss contact their insurance company and file a notice of damage.

For the 2011 crop year, wheat sales closing dates are Sept. 30. Producers are encouraged to consult their insurance agent before then.

Online

www.rma.usda.gov