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WA USDA Farm Service Agency


									              Risk Management Agency
               Spokane Regional Office

Spring 2010
General update on the Federal crop insurance
 program in the State of Washington:
   Insurable Crops in Washington
   Federal Crop Insurance Participation
   General Program Update
       2010 Changes
       Cherries – New ARH Program
       2011 – New Common Crop Policy
    ◦ Partnership Agreements
Federal Crop Insurance Private Sector Delivery System

                                                            8 writing in WA

                        16 Private Insurance
          Insurance Agents                            Loss Adjusters
              (25,000+)                                  (5,000+)
                    Agricultural Producers
Premium                      (1.1 Million Policies)
Subsidy                          264 M Acres
                             $79.95B in Coverage
   Apples, Barley, Blueberry, Cabbage, Canola, ARH
    Cherry Pilot, Corn, Cranberries, Dry Beans, Dry Peas,
    Flax, Forage Production, Forage (Alfalfa) Seed Pilot,
    Grapes, Table Grapes, Green Peas, Mint, Mustard,
    Nursery, Oats, Onions, Pears, Potatoes, Processing
    Beans, Processing Sweet Corn, Safflower, Stonefruit,
    Sugar Beets, and Wheat
   Adjusted Gross Revenue Pilot (AGR)
   Adjusted Gross Revenue-Lite (AGR-Lite)
   Pasture, Rangeland & Forage (PRF) Pilot
   Livestock Risk Protection – Cattle, Swine, Lamb
   Apiculture (API) Pilot
   Livestock Gross Margin Dairy Cattle
      Note: Program availability varies by county and subject to change
 2010 Crop Insured By-State/County
 Post on RMA Spokane RO Internet Page

ALASKA 2010                              A       B    C F                N     O          P       W
                                         P       A    A O                U     A          O       H
                                         P       R    B R                R     T          T       E
                                         L       L    B A                S     S          A       A
                                         E       E    A G                E                T       T
                     IDAHO 2010                  Y   A A B
                                                      G E                C
                                                                         R C      B       O
                                                                                          D       F   A   N     G G M M N O O P P C S S S W
                                                     L P A               A O      E       R       L   P   E     R R I U U A N R O A A U W H
                                                     FE P R              Y
                                                                         N R      A       E
                                                                                          Y       A   R   C     A E N S R T I F T N F G E E
                                                     A   L       L       O N      N       S       X   I   T     P E T T S S O
                                                                                                                C                            A     F A E A
                                                     L   E       E       L        S       P           C   A     H
                                                                                                                E N        A E         N     T B L R T T
                                                     F           Y       A                E           O   R     E          R R               O E O
                                                     A                                    A           T   I     S   P      D Y               E A W B C
                                                                                          S               N         E                        S N E E O
                                       OREGON 2010                        A A B B C C                     EC  C C A D F A N P G G MS MR N E O RO P P P C B S W
                                                                                                                    B                                                 S
                                                                          L P A L A A                       H O R S R O P E E R R I U U T A NN R E O A E W H
                                                                                                                    E                                                 U
013 Aleutians East                           X                            F P R U B N                       E R A A Y R R C A A E N S R ST I F A T N E E E            G
                                                                          A L L E B O                       R N N N        A I T C P E T T S S O                R A A T E A
016 Aleutians West   001   Ada                               X            X X E B A L
                                                                          L E                               R  X BX S X P G X C XA H E X   N     A E X     X
                                                                                                                                                           N    S T B S T T
                     003   Adams                             X            F   Y E G A                       Y    E      E E X O XR E            XR R       X       O E
020 Anchorage                                                        X
                     005   Bannock                           X       X
                                                                          A     R E
                                                                              X R                           2010 R    A A X B T B I C S C CP C CX BY D A XN P GE GA M MC N O
                                                                                                                          A X X          X X
                                                                                                                                                 D                                  O
050 Bethel                                                                                                       R    L S P A L N A A HE O R E R P E E RS RN I UO U A               N
                     007   Bear Lake                         X            X                   Y                  Y    F P R U E B N E A R A A Y R XC A A ES N SR R T
                                                                                                                            X X          X                                          I
                     009   Benewah                           X       X                X                               A X L E B O RS N N N
                                                                                                                          L X X                          I X T C P E T TN S S       O
                                                                                                                      L E E B A L R            B S P C A H E N          A E         N
                     011   Bingham     001 Baker             X       X    X       XX                        X     X       X X X          X X         X X X
                                                                                                                      F     Y E G A Y          E X E O X E X R          R X
                     013   Blaine      003 Benton            X       X            X X                       X     X A       X R E X X X R XX X T XI S
                                                                                                                                X                      A            P
                                                                                                                                                                    X   D Y
                                                                                                                                                                        X X
                                                                                                                                R              R X X   S     N      E
                                       005 Clackamas                          X   X X X                     X                           X                        X      X X
                                                                                                                                Y              Y             E      A
                                       007 Clatsop                                                                                                 X                S

                                                                             001 Adams                                X   X       X       X   X X             X X      X X X
                                                                             003 Asotin                                   X       X             X                   X X X
                                                                             005 Benton                               X   X           X X X X       X X X X X X        X        X
                                                                             007 Chelan                               X   X           X             X X X X            X
                                                                             009 Clallam                                  X               X                            X
                                                                             011 Clark                                    X X             X                            X
PNW Total Crop Insurance Participation

                   2009 Losses = $502 Million

* data not final                                updated 2/2010
Washington Insurance Participation                                              – All Crops

                                 Coverage in Millions of Dollars




                   2000   2001   2002   2003   2004   2005   2006   2007   2008 *2009
     2.6M ac insured in
     2009                                  CAT    Buy-Up

* data not final                                                              Updated 2/2010
    Washington Loss Payments – All Crops

                                     Loss Payments in Millions of Dollars







                       2000   2001    2002   2003    2004     2005   2006   2007   2008   *2009
                                                    CAT     Buy-Up

* data not final                                                                             updated 2/2010
                2009 Insurance Participation
                  Washington State - Fruit

                     Potential Insured     %Acres       Amount of
        Crops         Acres     Acres      Insured      Coverage
Apples                173,000 123,508    +3K ac 71%       $413.5M
Cherries               37,200   23,135        63%     +$105M
Pears                  25,200   14,490        57%     +$5M       $28M
Grapes                 62,700   46,312        75%     +$1.1M
Fresh Peaches           2,850    1,502        53%                 $2M
Fresh Apricots          1,100     757         69%               $1.7M
Fresh Nectarines        1,550    1,244        80%               $1.6M

                                                          Updated 2/2010
        2009 Insurance Participation
     Washington State – other select crops
    Crops    Potential   Insured        %Acres          Amount of
              Acres       Acres         Insured         Coverage
Onions         20,800      14,682            70%           $16.9M
Dry Peas      142,000     129,811    +48K ac     91% +$10M $25.9M
Barley        125,000      43,807    -60K ac     35% -$12.5M     $6.5M
Dry Beans      65,500      16,679    -12.5K ac   25%   -$.5M     $5.5M
Potatoes      155,000     105,320                68%            $139M
Sweet Corn     81,600      62,681                77%           $29.7M
Wheat        2,420,000   1,931,974   +180K ac    80% +$317M $736M

                                                          updated 2/2010
    NAP Program
    also available

Additional coverage
 and endorsement      Our job to tailor
 available for some
                      programs and coverage
                      for producers we serve

                              * New Program for 2010
Multiple Peril Crop Insurance (MPCI)
   Protects producer’s loss of revenue resulting from low yields
   Based on Producer’s individual Actual Production History (APH).
   Actual Production History (APH): Actual amount of production from a
    farm unit used to determine the insurance guarantee (4 build to 10 average)
   Insured can purchase from 50 up to 75%
    (85% on some crops) coverage based
    on Average APH on Insurance Unit
   If unit yield is below production guarantee
    insured gets paid a set amount (price election)
    for every bushel/lb, etc. below production
   Most crops include quality coverage
MPCI – Causes of Loss

   Adverse weather conditions
   Fire
   Insects
     if adequate control measures applied
   Plant disease
     if adequate control measures applied
   Wildlife
   Earthquake
   Volcanic eruption
   Failure of the irrigation water supply due to an
    unavoidable cause of loss occurring within the
    insurance period
Revenue Plans Available in PNW
   Revenue Assurance (RA)
       Barley   Idaho, Oregon and Washington – Spring Only
       Canola   Idaho AND NEW for 2010 Oregon and Washington
                 Spring Only
       Wheat    Idaho only – Winter and Spring
   Income Protection (IP)
       Barley   Idaho, Oregon and Washington
       Wheat    Idaho Oregon and Washington
   Crop Revenue Coverage (CRC)
    Corn       Idaho, Oregon and Washington
   Wheat       Idaho, Oregon and Washington
These products provide coverage to protect against loss of revenue
 14 caused by low prices or low yield’s or a combination of both.
Other Revenue Based Plans
Revenue Plans
     Adjusted Gross Revenue *
     Adjusted Gross Revenue-Lite (AGR-Lite) *
     Livestock Risk Protection (LRP) [Cattle, Sheep, Swine]
     Livestock Gross Margin (LGM) [Dairy]

Program availability varies by crop / state / county & is subject to change.

*whole farm insurance – all ag commodities produced are eligible for
  insurance based on insured adjusted gross revenue on a whole farm
  basis. Nearly 100 different commodities insured in Washington State
  many of which don’ t have separate MPCI policies available.
Catastrophic (CAT) Crop Insurance
   What does this policy cover / provide?
       Catastrophic loss
       50% deductible
       55% of established price
       Basic Unit

   What doesn’t this policy cover / provide?
     Optional units
     Price fluctuation on crops like wheat/barley with revenue
     Other policy options
    Cost: $300 per crop / county *
      *Waivers are available to Limited-Resource Farmers
Recent Program Changes in Washington
    Barley and Canola Revenue Assurance (RA)
        Expansion into all Barley and Canola counties
    Potato Policy
        Whatcom County: Final Planting Date changed from May 31
         to June 15
    Grape Policy Changes for 2010
        Insure by varietal type, (expanded from 5 groups to 23
         varietal specific types)
        May insure the value of grapes at the contract price (less
         harvest cost)
        Expanded into seven Western Washington counties: Clark,
         Island, Kitsap, Mason, Pierce, San Juan, Skagit
Recent Program Changes in Washington
     Mustard Policy
       Converted to regulatory program (Asotin, Columbia, Garfield, Lincoln,
        Spokane, Walla Walla, and Whitman).
     Cabbage Policy
       Insurance will not attach to any acreage planted to cabbage or any other
        Brassicaceae crop (e.g., cauliflower, broccoli, etc.) in either of the two
        previous crop years unless a written agreement request is initiated prior
        to sales closing date.
     Specialty Use Barley for 2010
       5 types covered
       Must be under contract
       Allows insured to insure based on contracted price
       Implement of 2010, except fall barley counties will be implemented in

Recent Program Changes in Washington
    Dry Peas / Lentils
        New policy 2009
        Expanded into Douglas County, WA for 2010
          Fall and Spring planted Austrians,
          Fall and Spring planted Smooth Green or Yellow
          Fall and Spring planted Lentils
        Winter Coverage for 2010
          Asotin, Douglas, Lincoln, Whitman

    Buckwheat
        WA Expansion 2010
        Grant, Franklin and Walla Walla counties

    Apple Policy
        Proposed rule is out for comment. RMA plans to have the final rule published
         for 2011 crop year.
Recent Program Changes in Washington
    Livestock Gross Margin (LGM)
      Expanded into all WA counties
          The Livestock Gross Margin for Dairy Cattle Insurance Policy
           provides protection against the loss of gross margin (market value of
           milk minus feed costs) on the milk produced from dairy cows.
    Livestock Risk Protection - Lamb
      Expansion to Washington State
      Changing the limit for an individual Specific Coverage Endorsement
        (SCE) from 7,000 to 2,000 head
      Addition of a 20 week endorsement to better fit the production and
        marketing cycles of range and inter-mountain operations
      A change from the ‘formula live’ AMS price series to the ‘formula carcass’
        AMS price series converted to a live basis by use of the dressing percent
        to establish coverage

Washington: Adams, Benton, Chelan,
Douglas, Franklin, Grant, Klickitat,
Okanogan, Walla Walla and Yakima
Huge increase in business in 2009 with 23,172           PNW Cherry Coverage
acres insured - $151 M in coverage and as of 2/8          New ARH Policy
$23.4 M in losses with many still being worked.        Comparison 2008/2009

Problems with Warehouses not accepting fruit.

RMA met with hundreds of industry
representatives and AIP’s and worked through all      50

the issues as best we could providing maximum
flexibility within the constraints of the policy                       2009

                                                           PNW Cherry Coverage
                                                           $ in Millions

2010 Business looks promising even after the problems we
had in 2009. Policies sold increased from 955 to 1,062.

RMA modified the quality standards in Washington to reflect
Washington’s Marketing Order and revised the Underwriting
Guides and Loss Standards
   Probably the single most important and
    fundamental change in the program in over 20
    years – big rollout planned this year
   One policy will provide yield protection, revenue
    protection, revenue protection w/the harvest price
   CRC (Crop Revenue Coverage), RA (Revenue
    Assurance), IP (Income Protection), and IIP
    (Indexed Income Protection) are replaced by the
    following two new plans of insurance:
      Revenue Protection

      Revenue Protection w/the
       Harvest Price Exclusion
Partnership Agreements
   The Risk Management Agency (RMA) is committed to
    Alaska, Idaho, Oregon, and Washington agricultural
    producers by:
       Providing Risk Management information and training,
       Establishing research projects to create additional tools for
        farmers/ranchers to better manage their risks, and
       Providing community outreach to traditionally underserved producers.
   The Agriculture Risk Protection Act of 2000 (ARPA)
    earmarked funds for RMA to form “partnerships” with public
    and private organizations. Alaska, Idaho, Oregon, and
    Washington agricultural producers have benefited from over
    $13.6 million since FY 2001, for outreach, education, and
   2010 Announcement Published in Federal Register
Washington Partnerships (active in 2010)
 OUTREACH Partnerships
 “Building Blocks for Risk Mitigation for Socially Disadvantaged Farmers and Ranchers”
 Rural Community Development Resources
    Provide outreach and technical assistance to underserved/unserved farmers/ranchers to meet
    RMA’s strategic goal of ensuring their customers and others are well informed.

 “Mobile Workshops for Women, Underserved, Latino and Socially Disadvantaged Farmers and Ranchers”
 Washington State Department of Agriculture
    Help Latino and women producers understand the variety of risk management tools available to
    help make risk management choices to better manage their farms in Washington State.

 Education SMALL SESSION Partnerships
 “Risk Management Training for Washington Livestock Producers.”
 Custom Ag Solutions
    Provide risk management training opportunities for 250 Washington livestock producers expected
    to participate in the 2009 Washington Cattlemen’s Association Annual Meeting.
   Spokane Regional Office
      Dave Paul, Director
11707 E. Sprague Ave, Suite 201
  Spokane Valley, WA 99206
   1-800-205-9953 Toll Free
 RMAs           New Online Resource Tool
   USDA Risk Management Agency home page
   OR

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