• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Arrigo Risk Consulting

  • Home
  • About Us
  • Our Services
    • Mediation
    • Consulting
    • Expert Testimony
  • Blog
  • Resources
  • Contact Us

Mobile Menu

Recent Comments

    Crop Insurance News and Analysis – November 27, 2019 – FAQs 2019 Corn Harvest

    November 27, 2019 By //  by Kim Arrigo

    On November 27, 2019, the Risk Management Agency issued Frequently Asked Questions (FAQs) regarding the 2019 Corn Harvest in Montana, North Dakota, South Dakota, and Wyoming. https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/2019-Corn-Harvest-in-the-Upper-Midwest-Great-Plains-States. Most of the FAQs involve the inability to harvest the crop by the end of the insurance period. With respect to unharvested acreage at the end of the insurance period, RMA states that producers need to file a timely notice of loss before the calendar date for the end of the insurance period and approved insurance providers (AIP) may; (1) on a case-by-case basis, authorize more time to harvest so claims can be based on harvested production in accordance with RMA procedures; (2) make final inspections and account for all acreage harvested and unharvested and appraised, including quality adjustment as allowed by the policy; (3) require the producer to leave representative sample areas when there are deferred appraisals and the producer wants immediate release of the acreage; or (4) settle claims based on the appraisal of remaining unharvested acreage.

    RMA states that an AIP can authorize an insured to harvest past the calendar date for the end of the insurance period if the delay in harvest was caused by an insurable cause of loss.

    RMA states that insureds are not required to harvest all acreage before an AIP can complete the claim and that claims can be based on appraisals.

    RMA states that if the insured cannot mechanically harvest the crop acreage due to an insurable cause of loss there are procedures in the Loss Adjustment Manual. RMA states that no production will be counted for the acreage the AIP determined cannot be mechanically harvested. If some of the acreage could be mechanically harvested, RMA states the AIP should appraise and count only the production that can be mechanically harvested. RMA states that wet field conditions, snow covered fields, or inaccessible roads or bridges does not mean the acreage can never be mechanically harvested with normal harvest methods and equipment and that the condition may be temporary. RMA states that the fact that it could cost more to harvest than the crop is worth does not mean that the insured was unable to mechanically harvest the crop.

    RMA states that AIPs can use harvested production from representative sample areas for appraised production and obtain samples for quality adjustments.

    RMA states that if the acreage is unharvested, the appraised production is included on the production report and used in the actual production history databases. If the acreage of the crop was destroyed or put to another use and an appraisal of production was not made, the production report will indicate the planted acres has a zero yield.

    RMA states that there are no quality adjustments for moisture content. RMA states that any adjustments for moisture is made before any quality adjustments.

    Regarding test weight, RMA states the quality discount is determined by the discount factor contained in the Special Provisions for the applicable county and no reduction in value discount is applicable.

    RMA states that when the corn production is damaged by an insurable cause of loss and production is rejected by the elevator or buyer due to low test weight every reasonable effort should be made by the insured and AIP to find a market for the damaged corn, including whether there are buyers outside the local marketing area, whether livestock feeding operations or other salvage buyers are willing to buy the damaged production, and give fair consideration to whether delivery of production to a market outside the insured’s local marketing area is equal to or greater than the production’s value at the distant market.

    RMA states that the zero market value production only applies if the AIP determines there are insured quality deficiencies and there is no salvage market. If the corn has a test weight of 49.00 or greater, then the zero market procedures are not applicable.

    RMA states that if the AIP determines there is zero market value production due to insured quality deficiencies, the production must be destroyed. If production is not destroyed then the discount factors apply.

    RMA states that if the edible portion of the crop is exposed to flood waters, it is considered adulterated and should not be used for feed and food. RMA states the production is considered to contain a substance or conditions qualifying under section C3 with a level exceeding the maximum allowed. RMA states no sample or test must be performed but the insured must give the AIP notice to inspect the crop. The production will be considered to have a zero market value if destroyed in an acceptable manner. RMA states that if the flood exposed production is comingled with other production not damaged by flood, the commingled production will not be adjusted for any quality deficiency listed in section C.

    ANALYSIS – On their face, the responses seem reasonable under the circumstances but raise the issue of what is different in the 2019 crop year from any other crop or crop year where excessive moisture has prevented or delayed the harvest of the crop. It would appear that these FAQs would apply to any crop with quality adjustment allowed but RMA has made their application limited to corn in Montana, North Dakota, South Dakota, and Wyoming. This limitation means that similar guidance will have to be provided for other crops, other states or other years, which increases the change of providing conflicting advice.

    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 27, 2019 – Following Another Crop and Not Following Another Crop
    Next Post: Crop Insurance News and Analysis – November 29, 2019 – Sugar Beet Crop Provisions »

    Primary Sidebar

    Recent Posts

    • Crop Insurance News and Analysis – October 23, 2020 – Final Agency Determination FAD-300, Section 6(d)(1) of the Common Crop Insurance Policy Basic Provisions
    • Crop Insurance News and Analysis – October 15, 2020 – Updated Nursery Crop Insurance Recordkeeping Frequently Asked Questions
    • Crop Insurance News and Analysis – October 13, 2020 – Commodity Exchange Price Provisions – Peanuts
    • Crop Insurance News and Analysis – September 30- October 6, 2020 – 2021 Hurricane Insurance Protection – Wind Index
    • Crop Insurance News and Analysis – September 25, 2020 – Enhanced Coverage Option

    Archives

    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019

    Footer

    CONTACT INFORMATION

    Arrigo Risk Consulting PLLC
    136 W. Dares Beach Rd. #115
    Prince Frederick, MD 20678

    CONTACT US

    PRACTICE AREAS

    • Mediation
    • Consulting
    • Expert Testimony
    • About Us
    • Our Services
      • Mediation
      • Consulting
      • Expert Testimony
    • Blog
    • Resources
    • Contact Us

    Copyright © 2023