Contributed by Kristen Schulte, Farm Business Management Specialist, Iowa State University Extension and Outreach, email@example.com, 563-547-3001
The 2014 Farm Bill extended the Noninsured Crop Disaster Assistance Program (NAP), and the program expanded its coverage by allowing producers to purchase additional coverage. Producers have the opportunity to make this change for policies set for the 2015 crop year until January 15th, 2015.
What does NAP cover?
- Crops (not livestock) that are commercially produced for food and fiber for which catastrophic coverage under Federal Crop Insurance is not available.
- Losses due to damaging weather (drought, hurricane, freeze, etc.), adverse natural occurrences (volcanic eruption, flood, etc), and other adverse natural occurrences (ex. excessive heat, insect infestation, ect.).
Signing up for NAP?
- Producers must apply by application closing date; application is completed with form CCC-471. Application closing dates may vary by crop.
- To be eligible for NAP, producers must report crop type and variety, location of acres, producers and related shares of crop, growing practice, crop planting date, and intended use of crop commodity. After planting or harvest, producers must also report acres planted, quantity of harvest, and disposition of crop. Production records may be required by FSA.
- Application must also include service fee. Service fee is $250 per crop or $750 per producer per administrative county. Premiums are also due if electing buy-up coverage.
- Beginning, limited resource, and traditional underserved farmers are eligible for a waiver of the service fee and 50% premium reduction (file form CCC-860).
What are the NAP coverage levels?
- Catastrophic Coverage (CAT) covers losses greater than 50 percent at 55 percent of the commodity price.
- Additional coverage, with premium, is available from 50 to 65 percent in 5 percent increments for production loss at 100 percent of average market price.
- Premiums for additional coverage is equivalent to 5.25 percent of calculated crop covered value (accounts for share of crop, eligible acres, approved yield, coverage level, and average market price)
Crop losses and NAP?
- When a loss occurs, notify the FSA office within 15 days of the natural disaster occurrence, prevented planting due to natural influences, date damage is apparent, or normal harvest date (whichever date comes first).
- For hand-harvested crops that require a timely assessment of loss before deterioration, notify FSA of losses within 72 hours for certain crops.
- Losses must be verified by the producer by completing form CCC-576, additional documentation/evidence may apply.
- Average market values are used. At the state level, FSA may set separate market prices for a crop based on represented farming practices or sales to different markets within the state.
- Retroactive pay for 2012 NAP assistance is available for losses to fruit crops (trees or bushes) in counties that had Secretarial disaster designations due to frost or freeze are available.
- Grazed acres can only participate in NAP at the CAT level; however, these acres can only participate in either NAP or Livestock Forage Disaster Assistance Program
- Annually, payments are limited to $125,000 per individual or entity.
- Additional information can be found at fsa.usda.gov/nap.
- A decision tool is available through FSA and collaborating universities, http://fsa.usapas.com/
An agricultural economics and business website.