NAP_Producer Meeting Presentation

Report
Marcinda Kester
Farm Programs Chief
Noninsured Crop Disaster
Assistance Program (NAP)
The Noninsured Crop Disaster Assistance
Program (NAP) provides financial
assistance to eligible producers affected
by natural disasters. This federally funded
program covers noninsurable crop losses.
NAP Life Cycle
3
NAP Life Cycle
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
4
What’s New?
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 but can still
purchase NAP at the CAT-level coverage.
5
Buy-Up Coverage (Continued)
Buy-up coverage levels:
Yield Level
50%
55%
60%
65%
Price Level
100%
100%
100%
100%
6
Buy-Up Coverage (Continued)
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
• 5.25% of the payment limit
7
Buy-Up Coverage (Continued)
For value loss crops, buy-up coverage will be
based on the maximum dollar value for
which the producer requests coverage
8
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)
9
Limitations and Eligibility
• $125,000 payment limitation
• $900,000 AGI provision
10
NAP Life Cycle
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
2015 NAP
11
Eligible Crops
12
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 (nonpilot) is not available
13
Eligible Crops (Continued)
• crops grown for food
• crops planted and grown for livestock
consumption
• crops grown for fiber, excluding trees
grown for timber, lumber, or paper
14
Eligible Crops (Continued)
• aquaculture species, including
ornamental (tropical) fish
• floriculture crops
• ornamental nursery (including
propagation stock)
• Christmas tree crops/commodities
15
Eligible Crops (Continued)
• turfgrass sod
• sea oats and sea grass
• seed crops/commodities where the
propagation stock is commercially
produced for sale as seed stock for
other eligible NAP crop production
16
Eligible Crops (Continued)
• industrial crops (including those
grown expressly for the purpose of
producing a feedstock for renewable
biofuel, renewable electricity, or bio
based products)
NEW - Biomass crops
17
Eligible Crops
Additional eligible crops:
• Sweet sorghum
• Biomass sorghum
18
Eligible Crops (Continued)
New for 2015:
NEW - Biomass crops
19
Biomass Crops
A biomass crop is any
feedstock crop grown for the
express purpose of
producing bio based product
Camelina
20
Biomass Crops
To be eligible for NAP assistance, producers
must provide evidence satisfactory to the FSA
County Committee:
• that a market exists for the crop
• the crop is grown for commercial biomass
purposes
Algae Bioreactor
21
Eligible Crops (Continued)
Expanded definition of industrial crops –
includes crops produced as a feedstock for:
• Renewable biofuel
• Renewable electricity
• Biobased products
22
Ineligible crops
• by-products resulting from processing or
harvesting an eligible crop, such as peanut
stover, oat straw, corn stover, wheat straw etc.
• nonornamental nursery plants, such as
strawberry plants, orange trees, etc.
Exception to this ineligibility could be plants
grown as seed crops
• home gardens or crops not being produced
for commercial sale
23
Ineligible crops (Continued)
• experimental crops
• volunteer stands, except native forage
• livestock and their by-products
• trees grown for lumber, timber, or paper
products
24
Ineligible crops (Continued)
CAT or additional level of insurance coverage is
available
Group Risk Protection insurance
Crop acreage for which individual coverage is
available only as a pilot product is eligible for NAP
assistance.
You may submit any exception requests to the
National Office for approval.
25
NAP Life Cycle
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
26
Coverage Options Overview
The Agricultural Act of 2014 authorizes FSA
to offer NAP catastrophic coverage for a
service fee and additional levels of NAP
coverage that require payment of a premium
in addition to the NAP service fee
27
Coverage Options Overview
(Continued)
NAP coverage will be available on eligible crops
at the CAT (basic) level of 50/55, or in 5 percent
increments from 50 up to 65 percent of the
producers approved yield at 100 percent of the
average market price as established by FSA
NOTE: Crops intended to be grazed are not
eligible for coverage levels above the Basic CAT
Level (50/55)
28
Coverage Options (Continued)
What level of loss is needed to trigger a NAP
payment?
If the Elected Coverage Level is…
Then the eligible cause of loss must
have reduced the expected unit
production by…
50/100
50 percent
55/100
45 percent
60/100
40 percent
65/100
35 percent
29
Electing Coverage Options
Producers are required to elect their
coverage level at the time of application on
the CCC-471 by the application closing date,
in the administrative county for the NAP
crops
Election of coverage level is irrevocable after
the application closing date
30
Electing Coverage Options
(Continued)
If a producer elects NOT to purchase
additional coverage levels, the level of
assistance will be calculated at the Basic CAT
level 50/55
31
Electing Coverage Options
(Continued)
Coverage levels are elected by pay group, as
demonstrated below:
Crop
Variety
Pay Crop
Pay Type
Planting
Period
Coverage
Level
Squash
Acorn
0155
001
01
55/100
Squash
Butternut
0155
001
01
55/100
Squash
Summer
0155
002
01
65/100
Squash
Zucchini
0155
002
01
65/100
Note: You cannot elect different coverage levels
for crops in the same pay group
32
Eligible Producer
33
Producer
A producer is an owner, operator, landlord,
tenant, or sharecropper, who both:
• shares in the risk of producing a crop and
• is entitled to share in the crop available for
marketing from the unit, or would have
shared had the crop been produced
34
Producer (Continued)
Landowners, landlords, tenants, contract
growers, or anyone else not having both a
share of the risk and a valid share of a crop
are ineligible for NAP
35
Producer (Continued)
To determine producer eligibility, one of the
following must be obtained:
• copies of:
– signed written leases with landowner or
landlord
– signed rental agreements with landowner or
landlord
– other legal documents showing land
ownership or control
Or...
36
Producer (Continued)
Obtain:
• statement signed by:
– landowner or landlord that producer had
control of the acreage
– operator or producer that producer had
control of the acreage on a farm
• FSA-578, producer print
37
“Types” of Producers
• Individuals (Persons)
• Joint Operations
• Legal Entities
38
Conservation Compliance
To be eligible for NAP benefits, persons and
legal entities must be in compliance with all
HEL and WC provisions according to 6-CP
39
NAP Life Cycle
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
40
Overview
The approved yield process is used as a
uniform method to calculate approved yields
for all producers.
• NAP approved yield establishment:
– Provides flexibility
– Provides a sound basis for expected production
– Safeguards the integrity of NAP
41
Overview (Continued)
Approved yields:
• are calculated by a producer’s unit
• for producers who:
–do not have records, limited to 65% of T-yield
–are able to provide acceptable records for 1-3
years, use a combination of actual and T-yield
–are new producers, may have an approved
yield based on unadjusted T-yield
42
Overview (Continued)
Producers who report NAP crop acreage are
responsible for reporting production for all
crops selected on CCC-471
Approved yields do not apply to:
• grazed forage
• value loss crops
• controlled environment crops
43
Yield Type Indicators
A producer’s production history is the basis
for calculating an approved yield
Different rules apply to different types of
historical production
Yield Type Indicators are an easy way to
indicate the type(s) of historical production a
producer has in his or her crop database
44
Approved Yields (Continued)
Base period:
• Minimum of 4 consecutive APH crop years
• Maximum of 10 APH crop years
– Except apples and peaches - 5 years max
• Does not include any year the crop was:
– Not planted
– Prevented from being planted
– Not reported as planted
45
Approved Yields (Continued)
The approved yield established for the
producer will be:
• equal to the simple average of the yields
included in the APH database
• based on APH years of production records
Reminder: The producer must maintain
production records for 3
crop years
46
Approved Yields (Continued)
If the producer
has records for:
The approved yield is the simple average of:
4-10 years
Those years
3 years
The 3 years + 100% of T-yield for missing year
2 years
The 2 years + 90% of T-yield for missing years
1 year
The 1 year + 80% of T-yield for missing years
No years
65% of the T-yield for 4 years
An assigned, zero credited, or substitute yield will not be considered
derived from producer-certified production records for the purpose
of attaining a higher percentage of T-yield
47
No Production Records –
No Prior Approved Yield
65%
The Approved Yield is calculated using ____
of the T-Yield for the 4 most recent crop
years for producers who:
• are not New Producers
• have not had an approved yield previously
established
• have no records of production
48
New Producer
Definition:
• A producer who has not been engaged in
farming for a share of the production of the
crop for more than 2 crop years in the county
– Specific rules are applicable with formation or
dissolution of entities
Yield Type “I”
49
New Producer (Continued)
The approved yield will be calculated based
on:
• 100% of the T-yield for years during which the
crop was not produced
• the actual yield for the 1 or 2 years for which
there is a record of production
50
Buy-up Options
51
Buy-up Options
Buy-up Options are applicable to crops on
which Buy-up coverage is elected
Options are:
• Direct Market
• Historical Marketing Percentage (HMP)
• Maximum Dollar Value
52
Direct Market Price Option
Option is available to accommodate growers
who receive a higher crop price, typically
because they do not use an intermediary
such as wholesaler or processor
53
Direct Market Price Option
(Continued)
Marketing channels include:
• Direct to consumers, such as:
– On-farm sales, including roadside stand or store
– Farmer’s Market
– CSA
– U-pick
• Indirect, such as through:
– Retailer
– Wholesaler
– Packer
54
Direct Market Price Option
(Continued)
Producer must provide:
• Actual marketing records
• Data for immediately preceding 3 years
Direct market percentage is recalculated each
year the Direct Market Price Option is
selected by producer
55
Historical Marketing Percentage
(HMP)
Option is available to accommodate growers
who have a history of marketing a crop
through multiple markets
Markets include:
• Processed
• Fresh
56
HMP (Continued)
Producer must provide:
• Actual marketing records
• Data for immediately preceding 3 years
The HMP is recalculated each year the HMP
Option is selected by the producer
57
Maximum Dollar Value
Option is available to all producers of value
loss crops to select an amount of coverage
based on the highest value of inventory they
have at any given time
58
Calculating Guarantees
59
Calculation of Guarantee Yield Based Crops
Eligible Acres
X
Producer Share
X
Approved Yield
X
Elected Yield Coverage
=
Production Guarantee
X
*Applicable price
X
Elected Price Coverage
=
NAP Guarantee
60
NAP Guarantee Example 1 –
Yield Based Crop
Variables
Crop
(Type/IU/Prac/
PlntPer)
Pumpkins
(SUG/FH/NI/
01)
Producer Share
1.000
Acres Certified
20
Approved Yield
100 cwt
Price
$38.3333
Coverage Level
65/100
Calculation
Eligible Acres
Share
App. Yield
Elect Yld Lvl
Production
=
Guarantee
X Price
X
X
X
20
1.000
100
0.65
1,300 cwt
38.3333
$49,833
Calculate Guarantee
61
NAP Guarantee Example 1 –
Comparison to Basic CAT Level
• Calculated NAP Guarantee at elected
65/100 Buy-up is $49,833
• Compare 65/100 guarantee to a
“guarantee” for Basic CAT Level (50/55)
– Production guarantee = 1,000 cwt
– NAP “guarantee” at 50/55= $21,083
• Buy-up is a significantly higher guarantee
62
NAP Guarantee Example 1 Per Acre –
Yield Based Crop
Variables
Crop
(Type/IU/Prac
/PlntPer)
Pumpkins
(SUG/FH/NI/
01)
Producer
Share
1.000
Approved
Yield
100
Price
$38.3333
Coverage
Level
65/100
Calculation
for Per Acre
X
X
X
X
Share
App. Yield
Elect Yld Lvl
Price
Elect Price Lvl
1.000
100
0.65
38.3333
1.000
$2,492
Calculate Guarantee
63
NAP Guarantee Example 2 –
Yield Based Crop
Variables
Crop
(Type/IU/Prac/PlntPer)
Apples
(COM/FH
/NI/01)
Producer Share
1.000
Acres Certified
32
Acres Determined
28
Approved Yield
350 bu
Price
$13.600
Coverage Level
65/100
Calculate Guarantee
Comparison to Basic CAT
Production Guarantee = 4,900 bu
Calculation
Eligible Acres
Share
App. Yield
Elect Yld Lvl
= Production
Guarantee
X Price
X Elect Price Lvl
X
X
X
28
1.000
350
0.65
6,370 bu
13.600
1.000
$86,632
NAP Guarantee = $36,653
64
NAP Guarantee Example 2 –
Per Acre Yield Based Crop
Variables
Crop
(Type/IU/Prac/Plnt
Per)
Apples
(COM/FH
/NI/01)
Producer Share
1.000
Approved Yield
350
Price
$13.600
Coverage Level
65/100
Calculate Guarantee
Calculation
for Per Acre
X
X
X
X
Share
App. Yield
Elect Yld Lvl
Price
Elect Price Lvl
1.000
350
0.65
13.600
1.000
$3,094
65
Basic Calculation of NAP Guarantee –
Value Loss Crops
Producer Elected Value on CCC-471 Application for Coverage
(applicable to Buy-up only)
X
Producer Share
X
Elected Coverage Level (65%, 60%, 55%, or 50%)
=
NAP Guarantee
66
NAP Guarantee Example 3 –
Value Loss Crop
Variables
Crop
(Type/IU/Prac/
PlntPer)
Grass
(WRG/SO/I
R/01)
Producer Share
1.000
Producer
Selected Value
$115,000
Coverage Level
65/100
Calculation
Maximum Dollar Value $115,000
X
Share
1.000
X
Elect Cov Lvl
0.65
$74,750
Calculate Guarantee
NOTE: Guarantee is based on Producer Selected Value as reported on CCC-471.
Established NAP Price used for FMV A or B is only used by FSA for loss
calculation purpose.
67
Basic Calculation of NAP Guarantee –
Grazing Crop
Total Acreage by crops with same carrying capacity and
grazing days
/
Carrying Capacity
X
Days in Grazing Period
X
Producer Share
X
0.50 (Basic Coverage Level; no buy-up)
X
Price
X
.55 (Basic Price Coverage; no buy-up)
=
NAP Guarantee
68
NAP Guarantee Example 4 –
Grazing Crop
Calculation
Variables
Crop
(Type/IU/Prac/Plnt
Per)
Mixed
Forage
(LGM/GZ/NI
/01)
Producer Share
1.000
Acres Certified
80
Acres/AU (NCT)
2.0
Grazing Days
223
Price
$1.413
Coverage Level
Basic
(50/55)
/
X
X
X
X
X
Eligible Acres
80
Acres/AU
Grazing Days
Share
Coverage Lvl
Price
Price Lvl
2.0
223
1.000
0.50
1.413
0.55
$3466
Calculate Guarantee
69
NAP Life Cycle
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
70
Acreage Reporting
Accurate Reporting
• County Office’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 eligibility
71
Acreage Reporting (Continued)
Timely reporting
• Acreage reports must be filed by the final
acreage reporting date
72
Notice of Loss
Crops
Premium
Billing
Coverage
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
73
Notice of Loss/
Application for Payment
74
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
75
Damaging Weather
•
•
•
•
•
•
•
•
Drought
Hail
Excessive Moisture
Freeze
Tornado
Hurricane
Excessive Wind
Insufficient Chill Hours* (Limited)
76
Adverse Natural Occurrences
• Earthquake
• Flood
• Volcanic eruption
• Any combination of the above
77
Related Conditions
Conditions resulting from damaging weather
or adverse natural occurrence, including but
not limited to:
• Heat
• Insect Infestation
• Disease
78
Ineligible Causes of Loss (some)
• 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
NOTE: See CCC-471 NAP Basic Provisions which
you will get a copy of at the time of application
for coverage.
79
Low Yield and Allowable Value Loss Notice of Loss Filing
File Notice Of Loss by the earlier of:
• 15 days after the damaging weather or
disaster occurrence or date the damage is
first apparent to the producer
• 15 days after the normal harvest date
80
Notice of Loss (Continued)
Low Yield
• Hand harvested crops
– Notify County Office within 72 hours, and
– File NOL within 15 days of earlier of
occurrence or loss becomes apparent
• Other crops as determined by DAFP
– Notify County Office within 72 hours, and
– File Notice Of Loss within 15 days of
earlier of occurrence or loss becomes
apparent
81
Grazing Notice of Loss
Grazing losses will be determined by:
• Independent assessments:
– Notice Of Loss allowed to be filed any time up
to the final application for payment date
• Similar Mechanically harvested forage:
– Notice Of Loss must be filed within 15 days of
occurrence or loss becomes apparent
82
Prerequisites to an Application for
Payment
• Report of acreage is filed
• CCC-576 Part B is filed and approved
• Acceptable production evidence provided
83
Prerequisites to an Application for
Payment
• Any document required to establish
producer eligibility
• Other documentation needed to
determine the correct payment amount
84
Application for Payment Deadline
Beginning in 2015, no later than 60 days after
the coverage period ends for all crops on the
unit
Exception: County Office Committee has the
authority to grant an extension up
to 180 days. The request must be
filed by the producer in writing
85
NAP Life Cycle
Crops
Premium
Billing
Coverage
Introductions and General
Session
Approved
Yield
Payment
Application
for Payment
Commodity
Report
Notice of
Loss
Summary of
Coverage
86
What will be covered in this
segment
• How is NAP Buy-up Premium Calculated
• Examples of Calculating Premium
87
Calculating Premium –
Statutory Changes (Continued)
A producer must pay the regular service fee
and calculated premium amount based on
each eligible crop enrolled and coverage level
elected
88
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• Start by multiplying the number of acres
devoted to the eligible crop by…
Number of Eligible Acres
89
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• the approved yield on the CCC-452 for the
producer by…
Number of Eligible Acres
NAP Approved Yield
90
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• the producer’s share in the crop by…
Number of Eligible Acres
NAP Approved Yield
Producer’s Share
91
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• the coverage level elected by the
producer…so, what coverage levels are
available?
Number of Eligible Acres
NAP Approved Yield
Producer’s Share
Coverage Level
92
Calculating Premium –
Statutory Changes (Continued)
But wait there is more…
• So What’s Next??
93
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• Now we multiply everything by the
applicable average market price as
determined by the State Committee.
Then…
94
Calculating Premium –
Statutory Changes (Continued)
How do we calculate the Premium?
• Finish the calculation by multiplying all the
previous data by the 5.25 percent premium
factor
• This premium is capped at $6,563 (based
on the payment limitation of $125,000
times 5.25 percent)
95
Calculating Premium –
Statutory Changes (Continued)
Premiums will be calculated by:
•
•
•
•
Unit
FSA administrative county
Each tax ID number
Crop definition according to pay group
96
Calculating Premium Examples –
Yield Based Crop
Yield Based Example – Pumpkins:
• 20 Acres Certified
• Current Approved Yield: 100 cwt. per acre
• NAP Price: $38.3333 per cwt.
• Coverage Level – 50-65
• Producer Share – 100 %
97
Calculating Premium – Examples –
Yield Based Crop (Continued)
Yield Based Example – Pumpkins:
Coverage
Level
Guarantee
Maximum
Benefit
Premium
Calc
Max
Premium
65/100
$49, 833
$149,500
$125,000
$7,849
$2,616
$6,563
Acres
20
60
Approved
Yield
100 CWT
Coverage
Level
.65
Price
Share
$38.3333
100%
98
Calculating Premium Examples –
Yield Based Crop (Continued)
Yield Based Example – Pumpkins:
Coverage
Level
Guarantee
Maximum
Benefit
Max
Premium
$125,000
Premium
Calc
$2,616
$7,849
65/100
$49,833
$149,500
60/100
$45,999
$138,000
$125,000
$2415
$7,245
$6,563
$6,563
99
Calculating Premium Examples –
Yield Based Crop (Continued)
Yield Based Example – Pumpkins:
Coverage
Level
Guarantee
Maximum
Benefit
Max
Premium
$125,000
Premium
Calc
$2,616
$7,849
65/100
60/100
$49,829
$149,500
$45,996
$138,000
$125,000
$2415
$7,245
$6,563
55/100
$42,166
$126,500
$125,000
$2,214
$6,641
$6,563
$6,563
100
Calculating Premium Examples –
Yield Based Crop (Continued)
Yield Based Example – Pumpkins:
Coverage
Level
Guarantee
Maximum
Benefit
Max
Premium
$125,000
Premium
Calc
$2,616
$7,849
65/100
$49,829
$149,500
60/100
$125,000
$2415
$7,245
$6,563
55/100
$138,000
$45,996
$42,163
$126,500
$125,000
$6,563
50/100
$38,333
$115,000
$115,000
$2,214
$6,641
$2,012
$6,037
$6,563
$6,037
101
NAP Participants with Socially Disadvantaged
(SDA) Beginning Farmer (BF) and/or Limited
Resource (LR) Status
SDA, BF and/or LR Status:
• The premium fee for buy-up coverage will
be reduced by 50 percent for producers
who meet the definitions for underserved,
BF and LR status and is capped at $3282 for
all crops grown in all counties.
102
LIMITED RESOURCE
APPLICANTS
A Limited Resource Farmer or Rancher or Forest Owner is:
A person with direct or indirect gross farm sales not more
than $176,800 (for FY2015) in each of the previous two
years.
AND
A person with a total household income at or below the
national poverty level for a family of four or less than 50
percent of county median household income in each of the
previous two years.
Or you can go to the following website and it will determine
it for you based on your county info:
http://www.census.gov//did/www/saipe/
Beginning Farmer
A Beginning Farmer or Rancher means an individual or
entity who:
Has not operated a farm or ranch, or who has
operated a farm or ranch for not more than 10
consecutive years. This requirement applies to all
members of an entity, will materially and substantially
participate in the operation of the farm or ranch.
104
Socially Disadvantaged
Farmer
Socially disadvantaged group- a group whose members have been subjected to
racial or ethnic prejudice because of their identity as members of a group
without regard to their individual qualities. The definition that applies to Titles I,
V, and VI includes members of a group subject to gender prejudice, while the
definition that applies to Titles II, IX, XII, and XV does not. Title XIV and the
Education and Risk Management Assistance provision in Title XII do not make
specific reference to the statutory definition of socially disadvantaged farmer or
rancher.
Socially disadvantaged Farmer or Rancher- a farmer or rancher who has been
subjected to racial or ethnic prejudices because of their identity as a member of a
group without regard to their individual qualities. This term means a farmer or
rancher who is a member of a socially disadvantaged group. Specifically, a group
whose members have been subjected to racial or ethnic prejudice because of
their identity as members of a group without regard to their individual qualities.
Those groups include African Americans, American Indians or Alaskan natives,
Hispanics, and Asians or Pacific Islanders.
105
Application for Payment
Crops
Premium
Billing
Coverage
Payment
APH
Crop
Report
Application
for Payment
Notice of
Loss
106
Payment Calculation
107
Crop Definition
Crops are defined by pay group and consist
of:
• Pay Crop Code
• Pay Type Code
• Planting Period
108
Loss Calculation –
Yield Based Crops
Yield based crop losses are determined as
follows:
X
=
–
=
Eligible Acres x Share x Approved Yield
Coverage level (50%, 55%, 60%, 65%)
Disaster Level
Production
Crop Loss (for payment)
109
Loss Calculation –
Value Loss Crops
Value loss crop losses are determined as
follows:
Lesser of Field Market Value A or
Maximum Dollar Value for Coverage
X Coverage Level
= Disaster Level
– Field Market Value B (Inventory after Disaster)
= Crop Loss (for payment)
110
Calculation of NAP Payment Yield Based Crops
X
Eligible Acres
Producer Share
X
Approved Yield
X
=
-
Yield Coverage level
Disaster Level
Production to Count
=
X
X
Net Production for Payment
Applicable Price
Price Coverage Percentage (buy-up 100%; basic 55%)
X
Payment Factor (Harvested or Unharvested)
-
Salvage Value ($ amount)
= Calculated NAP Payment
111
NAP Payment Example 1 –
Yield Based Crop
Variables
Calculation
Eligible Acres
20
X
X
Share
App Yield
Yld Coverage Lvl
1.000
100
0.65
100 cwt
=
-
Disaster Level
Production
1,300 cwt
600 cwt
Price
$38.3333
=
Net Production
for Payment
700 cwt
Coverage Level
65/100
X
Price
$ 38.3333
Harvested?
Yes
X
Price Lvl Coverage 1.000
Production
600 cwt
Crop
(Type/IU/Prac/
Plnt Per)
Pumpkins
(SUG/FH/NI/
01)
Producer Share
1.000
Acres Certified
20
Approved Yield
X
$26,833
112
NAP Payment Example 1 –
Comparison to Basic CAT Level
• Calculated NAP Payment at elected 65/100
Buy-up is $26,833
• Compare this calculate payment to the
same scenario with Basic CAT level
– Disaster Level= 1,000 cwt
– NAP payment at 50/55= $8,433
• Buy-up results in significantly higher
calculated payment ($26,833 vs $8,433)
113
Pumpkin Overview
CROP
COVERAGE
LEVEL
GUARANTEE
PREMIUM
PAYMENT
% OF LOSS
PUMPKIN
20 ACRES
65/100
$49, 833
$2616 PLUS
$250 ADMIN
FEE= $2866
54 % Loss in
Production
$26,833
PUMPKIN
20 ACRES
50/55
CAT LEVEL
$21,083
No premium
$250 admin
fee
54% Loss In
Production
$8433
2014 Farm Bill NAP Training
114
Calculation of NAP Payment - Value
Loss Crop
Smaller of Actual FMV A ($ Value of Pre Disaster Inventory) OR
Producer Selected Maximum Dollar Value
X
=
-
Coverage Level Percentage (65%, 60%, 55%, or 50%)
Disaster Level
FMV B ($ Value of Post Disaster Inventory + $ Value of
Ineligible causes of Loss)
=
Crop Loss
X
Producer Share
X
Unharvested Factor
X
Price Coverage Level Percentage
= Calculated NAP Payment
115
NAP Payment Example 3 –
Value Loss Crop
Variables
Crop
(Type/IU/Prac/
Plant Period)
Grass
(WRG/SO/IR
/01)
Producer Share
Calculation
FMV A
$115,000
X
Elect Cov Lvl
0.65
1.000
=
Disaster Level
$74,750
Producer
Selected Value
$115,000
-
FMV B
$50,000
Coverage Level
65/100
=
Crop Loss
$24,750
$ Value Before
Disaster
$ 200,000
X
Share
1.000
FMV B
$ 50,000
X UH Factor
X Price Cov Level
Unharvested
Factor
0.60
0.60
1.000
= $14,850
116
Loss Calculation –
Grazing Crop
Grazing crop losses are determined as follows:
÷
=
X
=
X
=
Producer Acres (acres x share)
Carrying Capacity
Animal Acres
Grazing Days
Expected Animal Unit Days (AUDs)
Loss Level (Similar Mechanical or STC Approved)
AUD loss (for payment)
117
QUESTIONS???
Contact Information:
Marcinda Kester
Farm Programs Chief
(859)224-7637
Website:
http://www.fsa.usda.gov/FSA/webapp?area=
home&subject=diap&topic=nap
118

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