Contact:
Shirley Pugh, 202-690-0437

PREVENTED PLANTING EXAMPLES - SOYBEANS

WASHINGTON, Jun 9, 2008 - Excessive rain has forced many farmers to delay planting crops this spring, which could make insured producers eligible for prevented planting (PP) indemnities.

RMA provides the following guidelines for Federal crop insurance policyholders, who have three insurance options for PP that apply to all Actual Production History (APH), Crop Revenue Coverage (CRC), and Revenue Assurance (RA) insurance policies.

RMA recommends insured producers contact their crop insurance agent before making any decisions regarding PP insurance claims.

*Note: Final planting date and late planting period varies by a producer’s area and crop.

1. Example 1: The insured producer takes prevented planting payment after the final planting date and does not plant a crop for the year. Insured producer selects 75-percent coverage level, resulting in $30,000 in total coverage (liability). Multiply $30,000 x 60* percent to get PP payment, $30,000 x 60 percent = $18,000 the insured producer would receive. *Producer could have selected a higher level of PP coverage (either plus 5 or 10 percent above base 60 percent available by the sales closing date).
2. Example 2: Insured producer plants soybeans after the final planting date but before the end of the late planting period (generally a 25-day late planting period available in all soybean states, although Special Provisions of Insurance may provide for a shorter late planting period in certain counties). For example, with a June 20 final planting date and 25-day late planting period would be July 15. Production guarantee or amount of insurance will be reduced 1 percent for each day after June 20 the crop is planted. For example, if the insured producer plants soybeans on June 27, or seven days after the final planting date for soybeans, the production guarantee or amount of insurance is reduced 7 percent. (In dollar terms, $30,000 - $2,100 = $27,900 insurance coverage in effect.)
3. Example 3: Insured producer takes reduced PP payment on soybeans, and plants another crop no earlier than July 16. With the late planting period for soybeans from June 21 – July 15, the producer cannot get a PP payment if a crop is planted on land before the end of the late planting period. The insured producer will have to accept 35 percent of PP payment. Finally, a 60-percent APH yield for the year on all acres claimed as prevented planting will be recorded for the year. For example, if the insured producer plants another crop on July 16 and collects soybean PP payment on acres, then:
   • 75-percent coverage level and $30,000 worth of coverage (liability)
   • Multiply $30,000 by 60 percent to get PP payment ($30,000 x 60 percent = $18,000 PP payment)
   • Multiply $18,000 x 35 percent since the insured producer planted another crop, $18,000 x 35 percent = $6,300 the insured producer would receive for soybean prevented planting acres
   • Insured producer will also have to accept a yield of 60 percent of APH for the year to be counted as part of their APH. Example - APH is 40 bushels per acre, 40 x 60 percent = 24 bushels per acre to be recorded for APH that year, and used in calculating APH for future years.

Spotlight: Prevented Planting