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    Crop Insurance News and Analysis – November 26, 2019 – Hybrid Seed Rice Crop Provisions

    November 26, 2019 By //  by Kim Arrigo

    On November 26, 2019, the Risk Management Agency (RMA) published the Hybrid Seed Rice Crop Provisions with changes effective for the 2020 crop year and a Product Management Bulletin: PM-19-0068 RMA stated it is revising the Hybrid Seed Rice Crop Provisions to remove the definition of “adjusted yield” and clarify definitions for “amount of insurance per acre” and “county yield.”

    ANALYSIS – The bulletin is scant on details. It does not state why the definition of “adjusted yield” was removed. It was included in the definition of “amount of insurance per acre.” Presumably it is related to the clarification of the definition of “amount of insurance per acre.” For 2019, the definition of “amount of insurance per acre” read “A dollar amount determined by multiplying the adjusted yield by the price election you select and subtracting any minimum guaranteed payment, not to exceed the total compensation specified in the processor contract. If your processor contract contains a minimum guaranteed payment that is stated in pounds, as hundred weights per acre, we will convert that value to dollars by multiplying it by the price election you selected.”

    For 2020, the definition of “amount of insurance per acre” was revised to read “A dollar amount determined by multiplying county yield by coverage level factor and the price election you select, and subtracting any minimum guaranteed payment, not to exceed the total compensation specified in the processor contract. If your processor contract contains a minimum guaranteed payment that is stated in pounds, as hundredweights per acre, we will convert that value to dollars by multiplying it by the price election you selected.”

    The change appears to be the substitution of the 2019 definition of “adjusted yield” for the term “adjusted yield.” No substantive change appears to have been made in the definition of “amount of insurance per acre.”

    With respect to “county yield,” for 2019, it was defined as “An amount contained in the actuarial documents that is established by FCIC to represent that yield that a producer of hybrid seed rice would be expected to produce if the acreage had been planted to commercial field rice.” For 2020, “county yield” is defined as “An amount, contained in the actuarial documents, representing yield that a producer of hybrid seed rice would be expected to produce if the acreage had been planted to commercial field rice, adjusted (increased) by FCIC, as only production from female plants is insurable under the hybrid seed rice policy.”

    The change appears to add language that allows for an adjustment, apparently only an increase, by RMA because only production from female plants are insurable under the policy. It is not clear what the purpose of this adjustment is, whether it was applied in prior years, why it would be an increase in yield if the male plants were removed, etc. This is a change that could have used an explanation in the bulletin.

    All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.

    Filed Under: Blog

    Previous Post: « Crop Insurance News and Analysis – November 25, 2019 – Hybrid Sweet Corn Seed Crop Provisions
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