Common Land Unit Acreage Reporting Plan

Report
Common Land Unit Acreage
Reporting Plan
2012 Crop Insurance Workshops
Drought, Politics and Risk Management Strategies
October 30 – November 2, 2012
Troy Brady, Vice President
Data Quality & Systems Design
National Crop Insurance Services
Industry Role
NCIS serves as the primary service
organization for the crop insurance
industry.
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NCIS Functions
• MPCI and Crop-Hail Program Development and Analysis
– Policy Analysis, Loss Adjustment Procedures, Legal
Analysis, Agronomic Research
• Economic and Actuarial Analysis
• Education and Training
– Loss Adjuster Schools – 17 (1,692 attendees)
– National Conferences – 5 (1,037 attendees)
– Annual Regional/State Meetings – 14 (531 attendees)
• Crop-Hail Advisory Organization and Statistical Agent
– Licensed by Individual State Insurance Department
• Public Relations and Industry Outreach
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Objective
To provide a history of the United States
Department of Agriculture (USDA) Risk
Management Agency’s (RMA) efforts to convert
acreage reporting to a common land unit (CLU)
basis, outlining the requirements and impacts of
these efforts for Approved Insurance Providers
(AIP), agents and the insured producer.
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Agenda
• Definition and examples of a Common Land Unit
• Background of RMA’s efforts to adopt acreage reporting by
CLU
• Brief overview of USDA’s Acreage Crop Reporting
Streamlining Initiative (ACRSI) and its requirements for
acreage reporting by CLU
• Requirements of RMA’s CLU implementation plan outlined
in RMA Bulletin IS-12-002
• Resources available to AIPs and agents to facilitate acreage
reporting by CLU
• Impacts to AIPs, agents and insured producers to report
acreage by CLU
• Industry efforts to address issues arising from the adoption
of acreage reporting by CLU
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What is a Common Land Unit (CLU)?
In Farm Service Agency terminology, a CLU is an
individual contiguous farming parcel, which is
the smallest unit of land that has:
1. A permanent, contiguous boundary
2. Common land cover and land management
3. A common owner, and/or
4. A common producer association.
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CLU Identification
• The Acreage Crop Reporting Streamlining Initiative (ACRSI)
defines a CLU as the smallest area of land with the same
land classification and ownership that has a permanent
contiguous boundary. Permanent boundaries may include:
field boundaries, fences, rivers, creeks, grass waterways,
tree/forest lines or other similar features.
• A CLU can be subdivided or contain subfields that are
separated from the balance of the field by a temporary
boundary that may change from year to year. Subfields
may be established annually and may represent different
commodities, cropping patterns, etc. that can be identified
by temporary boundaries. The CLU subfields will retain the
CLU identifier.
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CLU Identification
• A CLU is identified by FSA farm, tract, and field
numbers.
• FSA also assigns each farm, tract, and field a
unique identifier called the CLU ID. The CLU
ID is a globally unique identifier (GUID) that is
system generated, primarily used by
automated systems, and generally not known
by the producer.
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CLU Example #1
Rectangular fields outlined by CLU boundaries
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CLU Example #2
Center pivot irrigation with non-irrigated corners in
separate CLUs.
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Acreage Reporting By CLU
• Originated with the 2010 SRA in Appendix III (A-III) on
6/30/2009
– Companies were required to report 20% of their insured
acreage by CLU by the annual settlement date (Feb, 2011)
• RMA issued IS-10-004 on 7/9/2010 to clarify the new A-III
reporting requirement
– Producers could voluntarily provide the FSA Farm Number, Tract
and Field to identify CLU information when reporting acreage;
or
AIPs could derive CLU information from USDA’s Comprehensive
Information Management System (CIMS) data or other sources
to provide the FSA FN, Tract and Field to identify CLU
information for the acreage reported by producers
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Acreage Reporting By CLU
– In determining total acres, RMA included acreage for RA,
CRC and Yield Protection insurance plans for those
counties where RMA has provided valid CLU shape files by
5/1/2010
• All CLU records reported applied toward the 20%
minimum reporting requirement
– AIPs could choose which units to submit CLU records for,
but the FSA FN, Tract, Field Numbers must be reported for
all acreage in the unit
– AIPs that do not demonstrate substantial compliance with
this reporting requirement may be subject to penalties
under Section IV.(H) of the Standard Reinsurance
Agreement
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CLU Data Reporting
• Acreage reporting remains on a
county/commodity/unit/type/practice/t-yield map area
(TMA) basis
• CLU reporting was implemented as a sub-division of the
acreage line and is reported separately:
– For our center pivot with non-irrigated corners example:
• Acreage Line 1 Unit 00100 159.71 Irrigated acres
– CLU # 1 references Acreage Line 1 with 159.71 acres
• Acreage Line 2 Unit 00200 38.41 Non-Irrigated acres
–
–
–
–
CLU # 2 references Acreage Line 2 with 9.71 acres
CLU # 3 references Acreage Line 2 with 10.21 acres
CLU # 4 references Acreage Line 2 with 8.5 acres
CLU # 5 references Acreage Line 2 with 9.99 acres
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Increasing Requirement for 2011
• The draft 2011 SRA issued 12/4/2009
expanded on this requirement
– Companies were required to report by CLU 35% of
their insured acreage for additional coverage
policies under Yield Protection, Revenue
Protection (RP) and RP with Harvest Price
Exclusion insurance plans by February following
the reinsurance year (Feb, 2012)
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So Where is RMA Headed with CLUs?
• During 2010 SRA negotiations RMA
was asked for a timeline to convert
acreage reporting to a CLU basis over
the life of the SRA
–Informational Memorandum IS-12-002
was issued in response to this request
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So Where is RMA Headed with CLUs?
• In July 2010 USDA initiated a “Retrospective Review
Under E.O. 13563; Improving Common Acreage
Reporting Processes”
– Originally published in the Federal Register 4/20/2011
and later modified on 7/19/2011
– The goal of ACRSI is to establish common data elements
and automated processes for producers to report
common information for USDA programs, simplify and
reduce the reporting burden on producers, and reduce
USDA administrative and operating costs by sharing
similar data across participating agencies
• ACRSI recommendations called for common USDA reporting
standards, such as entity types, acreage reporting dates,
commodities, acreage location, and production terminology
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So Where is RMA Headed with CLUs?
• MGR-11-017, “Request for Comments to
Actual Production History (APH) Potential
Enhancements”, envisions “Correlating
producer and land experience into the
production guarantee”
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IS-12-002
• Acreage reporting at a CLU level will continue to
increase each year through 2016 when 100 percent of
all acreage for applicable plans of insurance will be
required to be reported by CLU
– 2012: 50% of the total acreage for additional coverage
policies under insurance plans 01, 02 and 03 by February
2013
– 2013: 70% of the total acreage for additional coverage
policies under insurance plans 01, 02 and 03 by January
2014
– 2014: 90% of the total acreage reported for insurance
plans 01, 02, and 03 (catastrophic and additional coverage)
by December 2014
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IS-12-002
– 2015: 95% of the total acreage reported for all applicable
insurance plans and coverage types (e.g. catastrophic,
additional), as provided in A-III, by November 2015
– 2016: 100% of the total acreage by CLU for all applicable
insurance plans and coverage types (e.g. catastrophic,
additional), as provided in A-III
• Insured must certify acreage by CLU for all applicable plans
• CLU data must be displayed on the Acreage Report
• Increasing the percentage requirement over several
years allows AIPs flexibility to fully integrate CLU
reporting to best meet the routine activities of agents,
policyholders, AIPs and RMA.
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CLU ACREAGE REPORTING
RY
2012
2013
2014
2015
2016
Total Acres for
Reporting
Designated
Percentage
Plans
Plans
195,529,218
50%
Buy Up Plans 1, 2, 3
195,529,218
70%
Buy Up Plans 1, 2, 3
209,918,903
90%
All Coverage Levels for Plans
1, 2, 3
227,276,641
95%
All Applicable (includes: APH
minus Category C Perennials,
Revenue Protection (RP), RP
with Harvest Price Exclusion,
Yield Protection, Dollar
Coverage minus Category C
Perennials, Yield Dollar
Option, GRP/GRPH/GRIP;
excludes livestock, tree
dollar, Aquaculture, nursery,
AGR, ARH, Pecan and RI/VI)
227,276,641
100%
All Applicable
Percent of
Total Acres for
Applicable
Designated
Acres
Plans*
97,764,609
43%
136,870,453
60%
188,927,013
83%
215,912,809
95%
227,276,641
100%
* Total Insured Acreage for the 2011 Crop Year is 264,595,305 as of 2/19/2012
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IS-12-002
• RMA has confirmed that the Common Crop Insurance
Policy Basic Provisions legally support collection of
acreage reporting data by CLU from the insured
• IS-12-002 is a roadmap
– Modifications, including collecting acreage reports by CLU
for perennial crops, actions by USDA such as Farm Bill
Amendments or ACRSI developments, may be required
• AIPs will only be required to submit policy information
by CLU when a CLU is available from FSA.
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CLU Reporting Resources
• CIMS provides AIPs access to state geospatial files of CLU polygons
– Used to identify field boundaries
– Released approximately every two months for the entire state in which
the AIP operates
– Producers provide planting records for each of their CLU polygons
• AIPs may electronically request from CIMS the current year and
prior year FSA acreage report information from the FSA Form 578
for their policyholder
– Producers may provide their FSA Form 578
• The total acreage used to calculate the annual % will be determined
using only reported acreage for those counties where CIMS has
provided complete and valid CLU data in each of the GIS CLU files
released from February prior to the RY through December of the RY
– For 2012: Feb 2011 - Dec 2011
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Impacts to Agents
• RMA anticipates advancements in geospatial
information systems and software that will provide the
opportunity to use precision agriculture technology as
well as AIP utilization of mapping technologies to
facilitate collection of acreage reports by CLU
• RMA will work with AIPs, FSA and other USDA agencies
to develop procedures and requirements to encourage
the use of this technology, as well as to simplify the use
of CLUs to reduce the burden on AIPs in reporting
acreage by CLU, and the USDA in maintaining the CLUs
– Heightened importance with Acreage Reporting Date
moving to 7/15 under ACRSI with an 8/15 billing date as a
result of the 2008 Farm Bill
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Impact to Insured Producers
• RMA believes that acreage identified by CLU location can
be used to:
– Improve actuarial soundness
– Enable the acreage to be correlated with other types of data
such as soils, slope, elevation or weather
– Reduce duplicative reporting by the producer
– Enable the efficient sharing of RMA data with Approved
Insurance Providers (AIPs), Farm Service Agency (FSA) and other
USDA agencies
– Reduce program vulnerabilities
– Assist with compliance efforts
• Realization of the full benefits and program improvements
lies in the future; however, to achieve such benefits it is
imperative to make progress in obtaining more refined data
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Issues with CLUs
• CLU files are created and maintained by FSA
• A number of issues with using CLU shape files
–
–
–
–
–
–
–
CIMS Location State is NULL (44,422 CLUs)
CLU Identifier has Invalid Characters (364,897 CLUs)
CLU Identifier is Duplicated (208,439 CLUs)
Location County Code is NULL (98,369 CLUs)
Farm Number is Zero (32,569 CLUs)
Tract Number is Zero (995 CLUs)
Field Number is Zero (32,569 CLUs)
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Industry Efforts to Resolve CLU Errors
• Ongoing discussions with RMA through NCIS’ Technology &
Information Processing (TIP) Committee
– RMA sends error listings to FSA after validating each iteration
• Industry meetings with Undersecretary Scuse
– FSA expects most issues to be resolved when they introduce their
Modernize and Innovate the Delivery of Agricultural Systems (MIDAS)
project in January 2013
• Industry formed a Production Reporting Workgroup earlier this year
– Extend transition to 2016 to even out annual increases
– Deferring perennial crop reporting until CLU reporting issues can be
resolved
– Reviewing CLU issues and potential means to mitigate impacts
– Modifying CIMS filters to ensure successful inquiry
– Modifying validation requirements
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Questions/Comments about today’s presentation:
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