February 2012 - National Crop Insurance Services

FEBRUARY 2012 • VOL. 45, NO. 1 

Explaining the Costs 

of the Crop Insurance Program 

Committee Sees Research 

First Hand 

Trade Talk 2011 

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THEIR CROPS AND THE PRODUCERS WHO GROW THEM. WE PARTNER WITH YOU 

TO INSURE AMERICA’S PRODUCERS. GO TO RCIS.COM TO LEARN MORE. 

We grow stronger every day—together SM 

Rural Community Insurance Agency, Inc., D/B/A RCIS. RCIS is an equal opportunity provider. © 2012 Rural Community Insurance Agency, Inc. All rights reserved.

TODAYPRESIDENT’S MESSAGE 

Isn’t there an 

App for that? 

Laurie Langstraat, Editor 

TODAY IS PROVIDED AS A SERVICE OF 

NATIONAL CROP INSURANCE SERVICES ® 

TO EDUCATE READERS ABOUT THE RISK 

MANAGEMENT TOOLS PRODUCERS USE 

TO PROTECT THEMSELVES FROM 

THE RISKS ASSOCIATED WITH 

PRODUCTION AGRICULTURE. 

TODAY is published quarterly–February, May, 

August, and November by 

National Crop Insurance Services 

8900 Indian Creek Parkway, Suite 600 

Overland Park, Kansas 66210 

If you move, or if your address is incorrect, 

please send old address label clipped from recent issue 

along with your new or corrected address to 

Laurie Langstraat, Editor, at the above address. 

NCIS Website: http://www.ag-risk.org 

NCIS ® EXECUTIVE COMMITTEE 

Steve Rutledge, Chairman 

Ted Etheredge, Vice Chairman 

Tim Weber, Second Vice Chairman 

NCIS ® MANAGEMENT 

Thomas P. Zacharias, President 

P. John Owen, General Counsel 

James M. Crist, CFO/COO 

Frank F. Schnapp, Senior Vice President 

Mike Sieben, Senior Vice President 

Creative Layout and Design 

by Graphic Arts of Topeka, Inc., Kansas 

Winner of The Golden ARC Award 

Printed on recycled paper. 

Over the past twelve to eighteen months, 

many of us have been in the process of making 

the transition to the iPad or similar tablet-based 

computers. As we embrace this new technology, 

we have become increasingly exposed to the 

somewhat Brave New World of “applications,“ 

commonly referred to as “apps.” 

So, what is an “app” - how do they work; 

what do they do? On a very basic level, apps are 

simply software designed to perform specific 

functions or computational operations. In the 

tablet environment, apps run the course of file 

management systems, office and personal 

productivity systems, calorie counters, etc. - you 

Tom Zacharias, NCIS President 

name it. 

Now, the stretch...what if we APPly this 

thought process to agricultural risk management and agricultural policy. Just suppose we 

needed to develop an infrastructure to provide financial stability and risk management 

tools for our nation’s farmers and ranchers. Suppose we wanted to combine the strengths 

of both the public and private sector to create such an infrastructure that would provide 

comprehensive risk management coverage to the majority of food and fiber crops found 

in the U.S. Hmm…let me think, isn’t there an app for that? Wow, Inspector Gadget?!?! 

What about the crop insurance program? Since the 1980s this public - private partnership 

has continually expanded to become the centerpiece of the agricultural safety net for U.S. 

farmers and ranchers. 

If this “app” is going to work, we would need to make sure that farmers get enrolled 

in the program, purchase adequate levels of coverage, and are aware of the various types 

of crop insurance products available. Isn’t there an app for that? Hmm...what about the 

nationwide network of state-licensed crop insurance agents? These hard working men 

and women scattered throughout rural America do just that. In 2011, the agency force 

enrolled more than 264 million acres, providing over $113 billion in crop insurance 

protection on over 1.1 million policies. 

Well, it just so happened that in 2011 we experienced major flooding and levee breaks 

along both the Mississippi and Missouri River systems. According to RMA, more than 

800,000 acres of cropland was flooded in 2011 in Missouri, Nebraska and Kansas (Rebecca 

Davis, Topeka RO - January 29, 2012). More pervasive and more devastating, in terms of 

impacted acres than the flooding, was the widespread drought experienced in the 

Southwest and Southern Plains. With all of those flooded and drought-stressed acres covered 

by crop insurance, how are farmers going to get paid in a timely basis for their 

insured losses? Isn’t there an app for that? Hmm…How about the nationwide network of 

Continued on page 34 

CROP INSURANCE TODAY ® 1

VOL. 45, NO. 1 

FEBRUARY 2012 

Table of Contents 

1 Isn’t there an App for that? 

4 Explaining the Costs of the Crop Insurance Program 

12 NCIS Awards Two Scholarships 

4 

14 2012 Spring Update Conference 

16 Committee Sees Research First Hand 

18 Trade Talk 2011 

20 Retirements: Ben Latham and Steve Harms 

22 In Memory of Patrick Flanagan 

24 In Memory of Marx M. Mannberger 

26 Step 5-Testing the Current Farm: 

Will the current farm be feasible in the future? 

16 

32 2011 Premiums: State Rankings 

38 Insurable Crops: Locations & Plans 

Visit 

www.cropinsuranceinamerica.com 

26 

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NCIS whose Membership Class (and service area, if membership is limited by service area) entitles them to receive copies 

of the enclosed or attached material to reprint, copy or distribute such NCIS copyrighted material in its present form 

solely for their own business use and solely to employees, adjusters or agents who are under contract with them, and 

as a condition to receiving such copies, such employees, adjusters and agents agree that they will not reprint, copy or 

distribute, or permit use of any such NCIS copyrighted material to or by any other person and/or company, or transform 

into another work such NCIS copyrighted material, without prior written permission of NCIS. 

© 2011 National Crop Insurance Services, Inc.

Making 

Cents 

of the 

Weather 

Weather forecasting is, by nature, inexact. Not even a trained meteorologist can 

accurately predict the weather with 100% certainty. On a daily basis, a farmer 

starts his morning with the goal of a successful harvest, but knows a devastating 

weather event seriously impacting production could instantly occur. 

This uncertainty means billions of dollars of crops are always at risk. This impacts 

not only the farmer’s livelihood, but food prices, fuel costs and national economies. 

Last year, crop insurance policies protected over $113 billion of crops. This makes 

good economic sense. Contact your ProAg agent to create a risk management plan 

that will provide you with the peace of mind and financial security you deserve. 

The Past, Present and Future of 

Agricultural Risk Management® 

Producers Ag Insurance Group, Inc., d/b/a ProAg ® , is a wholly owned subsidiary of 

CUNA Mutual Group. ProAg is an equal opportunity provider. 

© 2012 ProAg. All Rights Reserved.

TODAYcrop insurance 

Explaining the Costs 

of the Crop Insurance Program 

By Keith Collins and Frank Schnapp, NCIS 

This article examines the information 

typically presented to the public on the 

costs of the Federal crop insurance program. 

Government presentations, the 

source of most program cost data, range 

from simple to very complex. We believe 

that many presentations lead to misunderstanding 

of the role of payments made to 

approved insurance providers (AIPs), the 

companies that deliver the program to producers. 

Confusion about the financial data 

may lead to misunderstandings of the costs 

and benefits of the program to producers, 

taxpayers and the companies. 

A couple of examples illustrate the 

issue of interpreting program financial 

data. While the risks of underwriting gains 

and losses are shared between the government 

and the companies, the underwriting 

gains and losses of the government are seldom, 

if ever, presented. Often when the 

AIPs have a large underwriting gain, the 

government has one as well, which 

reduces the cost of the crop insurance program 

to the taxpayer. Another source of 

confusion is the vaguely labeled “administrative 

and operating expense reimbursement” 

that is paid to the companies to 

cover their costs to deliver the program, 

such as agent commissions, office space, 

equipment, etc. However, these payments, 

while a cost to the government, do not 

fully reimburse companies for their delivery 

expenses. Moreover, these payments, 

which are often seen as a subsidy to the 

AIPs, are more properly viewed as a subsidy 

to producers. This article presents 

financial data on the crop insurance program 

to help clarify these ambiguities. 

Federal Budget 

Presentations of Crop 

Insurance Program Costs 

The Federal government presents data 

on the costs of Federal programs, including 

the crop insurance program, in a number 

of ways. To provide some background for 

those searching government data bases for 

crop insurance data, the following primary 

concepts are used in the Federal budget 

presentations: 

4 FEBRUARY 2012

• Budget Authority: The authority of the 

Executive Branch to commit funds of 

the Federal Treasury. Congress provides 

this authority to agencies to spend 

funds to carry out programs as provided 

in law through annual appropriations 

acts and other legislation that 

authorizes spending. 

• Program Level: The gross value of all 

financial assistance provided to the 

public through a program. This assistance 

may be in several forms: grants; 

guaranteed or direct loans; cost-sharing; 

research, technical assistance or other 

services; or, in-kind benefits such as 

commodities. Program level may 

exceed actual spending when assistance 

provided does not result in 

spending. An example is a loan guarantee 

program where the program level is 

the value of all loans guaranteed, but 

the actual Federal spending may only 

be the payments made to lenders for a 

few defaulted loans. 

• Outlays: The actual cash spent from 

the Federal Treasury to meet the funding 

commitments of agencies. Outlays 

are less than budget authority when the 

agency does not spend all the funding 

it is authorized to spend in a fiscal year 

(FY). This may happen for a variety of 

reasons, such as ineligibility of expected 

beneficiaries or spending that is paid 

out over several fiscal years. Outlays are 

further divided into discretionary outlays 

and mandatory outlays. 

• Discretionary outlays: Cash spent 

under authority of the annual appropriations 

acts developed by the 

Congressional appropriations committees 

as part of the yearly appropriations 

process. 

• Mandatory outlays: Cash spent 

that is not controlled by the annual 

appropriation process. Mandatory 

outlays generally cannot be 

increased or decreased in a given 

year without a change in substantive 

law by the authorizing committees 

that have jurisdiction over the governing 

statute. 

For crop insurance, the data on these 

financial concepts are variously presented 

on a crop year, fiscal year, calendar 

year and reinsurance year basis for the 

Risk Management Agency (RMA) and the 

Federal Crop Insurance Corporation 

(FCIC). There are four important sources 

of budget information for the crop insurance 

program. The first of these is RMA 

itself, which presents tables on their 

website for crop years and fiscal years 

for “Government Costs of the Crop 

Insurance Program, 2002-2011” with 

additional tables for “Premium and 

Other Income.” These are available at 

http://www.rma.usda.gov/aboutrma/ 

budget/costsoutlays.html. The tables 

show direct outlays and some of direct and 

indirect income flows that relate to outlays. 

A second source is the USDA Office 

of Budget and Program Analysis 

(OBPA), which publishes the Budget 


Summary and Annual Performance 

Plan of all USDA agencies at 

http://www.obpa.usda.gov/budsum/ 

FY12budsum.pdf. Summary data are presented 

for budget authority, program level 

and outlays. The third source is detailed 

budget explanations of each agency’s budget 

at http://www.obpa.usda.gov/explan_ 

notes.html. The fourth source is the 

President’s Budget, available from the 

Office of Management and Budget. The 

crop insurance accounts are presented in 

detail in the Appendix to the Budget at 

http://www.whitehouse.gov/sites/ 

default/files/omb/budget/fy2012/assets/ 

agr.pdf. In addition, there are other 

sources, such as FCIC financial reports. 

These sources present an array of data 

that are made very complicated by use of 

alternative time periods and budget concepts. 

In some cases, a single table will 

mix crop year, fiscal year and budget concepts. 

A fiscal year includes data from two 

crop years, so it may be difficult to relate 

a fiscal year’s program costs to how natural 

disasters or price changes for one crop 

year show up in the data. Timing of payments 

and receipts also affect fiscal year 

data. To simplify our discussion here, we 

focus primarily on data closely associated 

with a crop year. 

The difference between the three 

budget concepts also needs to be considered. 

Because the crop insurance 

program has authority to spend funds as 

necessary to operate the program, “budget 

authority” is usually determined by 

and thus very similar to outlays. The 

concept of “program level” is essentially 

gross indemnities plus payments to 

companies, i.e., the gross assistance 

before producer-paid premiums are 

considered. The goal in this discussion 

is to present the cost of the crop insurance 

program as “outlays,” that is, direct 

spending associated with delivering the 

program and paying claims for the 

annual cycle of planting and harvesting 

a crop. In reality, some small level of 

outlays may be obligated in the crop 

year but paid out during the next crop 

year, or some outlays within a crop year 

may be for obligations made during the 

prior crop year. 

Table 1. 

Crop Insurance Program Government Costs (million dollars) 

FY 2010 FY 2011 1/ 

Discretionary 

RMA Operating Expenses 80 80 

Mandatory 

Delivery and Other Administrative Expenses 2/ 1,430 1,393 

Gross Indemnities 3,118 7,588 

Underwriting Gains 3/ 2,448 999 

Transfer to Agricultural Management Assistance Program -6 -6 

Program Level 6,996 9,980 

Less Producer Paid Premium and Other Fees -2,449 -2,986 

Budget Authority, Discretionary and Mandatory 4,627 7,074 

Outlays 4/ 4,784 7,069 

1/ Estimate based on initial FY 2011 Continuing Resolution. 

2/ Includes research, development and other expenses. 

3/ Payments to approved private insurance companies. 

4/ Outlays are from the USDA Budget Summary and Annual Performance Plan (p. 121). Outlays differ from budget 

authority for the following reasons. The FY 2010 outlay exceeds the budget authority because unpaid obligations 

from FY 2009 were paid out in FY 2010, and these exceeded the unpaid obligations from FY 2010 carried into FY 

2011. For FY 2011, the level of unpaid obligations carried into FY 2012 is estimated to be $5 million more than the 

level of unpaid obligations carried into FY 2011 from FY 2010. 

Crop Insurance Program 

Outlays 

As an example of a crop insurance program 

cost presentation by USDA, consider 

the data in USDA’s Budget Summary and 

Annual Performance Plan (p. 30) used to 

explain RMA’s budget proposed by the 

administration for FY 2012. Table 1 shows 

cost data for FYs 2010 and 2011. 

While Table 1 provides an overview 

of the costs of the crop insurance program, 

it does not explicitly provide data 

on payments to the companies, subsidies 

to producers or underwriting gains of the 

government. The data presented make it 

difficult to understand the distribution of 

the program costs among the program 

participants. However, other government 

tables provide additional information. In 

addition, the accounting firm Grant 

Thornton, LLP publishes an annual report 

on the profitability and effectiveness of 

the crop insurance industry using data 

obtained from the AIPs. Using these alternative 

sources, Table 2 was constructed 

to provide greater insight into the program 

outlays, the distribution of program 

benefits and costs, and the relationship of 

the costs to crop year production performance. 

RMA agency and related 

administrative cost data are not included. 

Most of the data presented are RMA reinsurance 

report data but crop year data 

are also used. 

Because government and private data 

sources do not report all variables for the 

same time periods and include different 

cost components, total program outlays in 

Table 2, which use reinsurance data and 

crop year data may differ slightly from 

other presentations. Some presentations 

include RMA administrative costs (e.g., 

salaries, IT costs, etc.) and other income 

(e.g., interest, transfers from other appropriations, 

etc.) and other expenses (e.g., 

research costs from mandatory funding). 

These categories are very small in comparison 

with the items presented in Table 

2. Even variables in government sources 

that are presented for the same time period 

and appear to include the same components 

sometimes differ across sources, 

and not enough detail is presented to 

explain the differences. 

Focus on the last column of Table 2, 

program outlays. We first discuss outlays as 

typically presented: cost items that are 

direct spending by the government. Such 

spending items are payments to producers, 

which are net indemnities (defined as gross 

indemnities, column (3), minus farmer-paid 

premium, column (2)) plus payments 

made to AIPs. We then examine alternative 

presentations. 


Table 2. 

Crop Insurance Program Outlays (million dollars) 

Gross Producer Gross Loss UNDERWRITING GAINS PRODUCER SUBSIDIES AIP Actual Program 

Year Premium Share of Indemnities Ratio Gross AIP FCIC For For A&0 Outlays 

(1) Premium (3) (4) (5) Share 1/ Share Premium AIP A&0 Expenses (8) + (9) – (7) 

(2) (6) (7) (8) (9) (10) (11) 

2001 2,978 1,206 2,965 1.00 12 346 -334 1,772 636 816 2,741 

2002 2,909 1,168 4,058 1.39 -1,149 -48 -1,101 1,741 628 826 3,470 

2003 3,434 1,392 3,259 0.95 176 377 -201 2,042 736 900 2,980 

2004 4,186 1,709 3,291 0.79 895 691 203 2,477 894 1,021 3,167 

2005 3,945 1,601 2,341 0.59 1,604 915 689 2,344 833 990 2,488 

2006 4,709 2,027 3,551 0.75 1,158 822 336 2,682 962 1,159 3,308 

2007 6,547 2,724 3,465 0.53 3,082 1,572 1,510 3,823 1,335 1,565 3,648 

2008 9,832 4,141 8,719 0.89 1,113 1,095 18 5,691 2,013 2,173 7,686 

2009 8,949 3,522 5,216 0.58 3,733 2,298 1,435 5,427 1,619 2,130 5,611 

2010 7,592 2,882 4,235 0.56 3,357 1,919 1,438 4,710 1,371 1,815 4,643 

Total 55,081 22,372 41,100 0.75 13,981 9,987 3,993 32,709 11,027 13,394 39,742 

1/ After net book quota share. 

The data in this table are taken from publicly available sources. Crop year and reinsurance year data are used; as a result, aggregated numbers may differ slightly from other presentations. 

Sources by column number: 

■ Columns (1), (3), and (6) are reinsurance data from RMA Reinsurance Reports accessed on 1/3/12, available online at http://www.rma.usda.gov/tools/reinsurance.html. Column 

(4) is (3) divided by (1). Column (5) is column (1) minus column (3). Column (7) is column (5) minus column (6), and represents the AIP share of underwriting gains on a reinsurance 

year basis and adjusted for quota share. 

■ Column (2) is column (1) less column (8), where column (8) is from the RMA National Summary of Business Reports, available online at http://www.rma.usda.gov/data/sob.html. 

■ Column (9) is from an RMA table "Crop year government cost of federal crop insurance," available online at http://www.rma.usda.gov/aboutrma/budget/cycost2002-11.pdf. 

■ Column (10), actual expenses as a percent of gross premium, is from Grant Thornton, LLP, "Federal Crop Insurance Program Profitability and Effectiveness Analysis, 2010 

Update," January 13, 2011, available online at http://www.ag-risk.org/NCISPUBS/SpecRPTS/GrantThornton/Grant_Thornton_Report-2010_FINAL.pdf. The reported expense 

shares are for calendar years and were multiplied by gross premium for the corresponding reinsurance year (e.g., 2009 expense share multiplied by 2009 gross premium). The average 

expense share for 2005-09, 23.9%, was used to estimate actual expenses for 2010. 


Typical presentation 

Outlays = net indemnities + AIP underwriting 

gains + payments made to AIPs 

on behalf of producers for program 

delivery (A&O payments) 

Using column numbers: 

(11) = (3) - (2) + (6) + (9) 

This aggregation highlights, for example, 

that increases in farmer paid premiums 

(2) reduce program costs and increases in 

AIP underwriting gains (5) increase them. 

However, program outlays may be 

obtained by aggregating the data in the 

table several different ways. The different 

ways chosen can be used to illustrate 

which activities add to, or reduce, crop 

insurance program costs. 

Alternative presentation #1 

Outlays = gross indemnities - gross premiums 

+ AIP underwriting gains + producer 

premium subsidies + payments 

made to AIPs on behalf of 

producers for program delivery 

(A&O payments) 


(11) = (3) - (1) + (6) + (8) + (9) 

Although premium subsidies are not 

direct spending by the government, this 

aggregation shows the important role of 

premium subsidies and A&O subsidies 

paid on behalf of the producer in the total 

cost of the program. This presentation also 

highlights a common error in evaluating 

the cost of the program. Critics tend to 

focus on the revenue paid to the AIPs, (6) 

+ (9), disregarding the large premium subsidies 

to producers. The ability for AIPs to 

earn the underwriting gains shown in (6) 

comes about from the gross underwriting 

gains for the program itself as shown in (5). 

These gains are shared between the AIPs 

and FCIC. 

Alternative presentation #2 

Outlays = producer premium subsidies + 

payments made to AIPs on behalf of 

producers for program delivery 

(A&O payments) - FCIC underwriting 

gains 


(11) = (8) + (9) - (7) 

This aggregation is used in the heading 

for column (11) of Table 2. The aggregation 

shows how positive FCIC underwriting 

gains reduce program outlays. This ability 

of the government to reduce its cost via 

underwriting gains is generally not considered 

in discussions of the performance of 

the program. 

Insights from Crop 

Insurance Program Cost 

Data 

Several conclusions may be drawn 

from the data presentation in Table 2 that 

may not be generally reported when crop 

insurance program costs are presented in 

discussions about crop insurance. 

• The crop insurance companies do 

not receive all the crop insurance 

program underwriting gains, particularly 

in recent years. For background, 

underwriting gains are part of 

the gross income of AIPs. Gross income 

must be high enough to cover gross 

expenses and a profit. The profit must 

be sufficiently high to provide a competitive 

rate of return (net return on 

retained premium, assets or equity) to 

ensure private sector participation in 

the program. Otherwise, private investments 

in crop insurance would migrate 

to more profitable industries over time. 

Underwriting gains are not profit; they 

are gross income that contributes to 

profits. In any year, underwriting gains 


may be positive or negative. To offset 

years with low or negative gains, gains 

must be high—above average—in other 

years to ensure that AIPs earn a competitive 

rate of return over time. Since 

2001, the crop insurance companies 

have received 71 percent of the underwriting 

gains generated by the program. 

Over the past five years (2006-10), the 

industry has received just 62 percent of 

the underwriting gains. 

• The government receives a high 

share of underwriting gains. The 

share of underwriting gains not 

received by the AIPs—29 percent of 

gains over the past 10 years and 38 percent 

of the gains over the past five 

years—went to FCIC. 

• Government underwriting gains 

reduce the cost of the crop insurance 

program. These gains represent 

a benefit to the Treasury and taxpayers 

that is not identified in most government 

accounts of program costs. 

• Total program cost is usually less 

than the total of premium subsidies, 

AIP underwriting gains and 

delivery payments to companies. 

This emphasizes that the combined 

payments to companies and premium 

subsidies to producers overstate the 

commitment of the taxpayer to the program. 

The true cost to taxpayers also 

needs to take into consideration the 

excess of premiums over indemnities 

as indicated in (5). An illustration of the 

cash flows is presented in Figure 1. 

• Producer subsidies include payments 

made to companies on behalf 

of producers to pay program delivery 

expenses. In insurance markets 

generally, a purchaser of insurance 

pays a premium for protection that 

includes two components: a risk 

premium, which covers expected 

losses due to insured risks, and an 

expense load, which covers delivery 

costs including sales, loss adjustment 

and other administrative 

costs. Under the crop insurance program, 

producers receive a subsidy that 

covers on average about 60 percent of 

the risk premium and a subsidy that 

covers 100 percent of the expense load. 

Figure 1. The Financial Flows Underlying Crop Insurance for 2008 

Subsidies 

for Premium, $5.7 bil., 

and A&O, $2.0 bil. 

Producers 

Indemnities, 

$8.7 bil. 

Consider data for 2010, a year in which 

producers paid $2.9 billion in premiums. 

In an unsubsidized market, 

assuming the same premium rates as in 

2010, had producers purchased the 

same level of coverage, they might 

have paid a total premium of $9.4 billion 

($7.6 billion in risk premium and 

$1.8 billion in expense load, columns 

(1) and (10)), assuming 2010’s actual 

delivery expenses. The $2.9 billion producers 

actually paid amounted to only 

31 percent of the premium that might 

have prevailed in an unsubsidized market. 

Of course, actual delivery expenses 

in a free market are unknown, and 

2010’s actual expenses are used as a 

proxy for the free market delivery cost. 

• Producer subsidies account for the 

bulk of crop insurance program 

costs and benefits. Alternative presentation 

#1 showed that program costs 

are equal to gross indemnities less 

gross premiums plus AIP underwriting 

gains plus producer premium subsidies 

plus producer A&O subsidies. For the 

past five years, program outlays averaged 

$5 billion. Premium and delivery 

expense subsidies to producers averaged 

$5.8 billion, as compared an average 

of $1.5 billion in AIP underwriting 

RMA 

Total Premium, 

$9.9 bil. 

A&O Payment, 

$2.0 bil. 

Underwriting 

Gain, $1.1 bil. 

AIPs 

gains. AIP underwriting gains were 

paid out of the $2.5 billion in average 

underwriting gains for the program, 

with the government retaining the 

remaining gains. 

• Producer subsidies for A&O do not 

cover the actual delivery costs of 

companies. Discussions of the program 

often treat the producer A&O 

subsidy as a benefit to the AIPs or even 

as an additional source of profit. In 

reality, the existence of the A&O subsidy 

is simply a consequence of the 

way the government accounts for its 

costs. In a typical insurance program, 

policyholders would pay for the cost of 

delivery as part of their premium. 

Under the Federal crop insurance program, 

FCIC pays this cost directly to 

AIPs on behalf of producers. This 

works to the benefit of taxpayers and 

to the disadvantage of AIPs in that payments 

have been below actual delivery 

expenses by an average of over $250 

million per year during 2005-2009. 

Although the 2011 Standard 

Reinsurance Agreement will cap agent 

compensation at the total A&O payment, 

it is likely that total delivery costs 

will continue to exceed the A&O subsidy 

to producers. 


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An Alternative Perspective on the 

Government’s Role 

The presentation of government outlays in support of the 

Federal crop insurance program, as described above, could easily 

be misinterpreted. Table 2 describes the program as though the 

government was the risk bearer and the AIPs were merely a 

means for delivering the program to producers. The reality is quite 

different: AIPs actually take the lead role in bearing the risk. As 

such, AIPs are entitled to an economically fair return or profit due 

to their willingness to risk their own capital in the program. Rather 

than being the risk bearer, FCIC is more accurately described as 

participating in the program as a reinsurer. FCIC is not the only 

reinsurer active in the program—private sector reinsurers are also 

heavily involved. The difference is that AIPs have the ability to 

negotiate both the structure and cost of reinsurance with their 

reinsurers, whereas their ability to negotiate with FCIC is extremely 

limited. FCIC’s involvement as a reinsurer comes about for two 

distinct reasons. First, the terms of the SRA require AIPs to issue 

policies to all eligible producers. However, many producers would 

find it difficult to obtain insurance for various reasons in a fully 

private insurance market. To satisfy the social objective of making 

insurance available to all eligible producers, AIPs have been willing 

to insure these risks, but only under the condition that FCIC 

provide reinsurance protection due to the likelihood that these 

risks will be unprofitable. The second reason is to address the possibility 

of widespread losses due to drought or other weather 

events that are beyond the capacity of the insurance industry to 

absorb. This was an important issue in the early years of the program 

but is much less important today, as private sector reinsurers 

have gained familiarity with the program. Even though the 

need for or benefit of reinsurance through FCIC is relatively limited, 

FCIC still takes a large share of the potential underwriting 

gains. While it might be possible for AIPs to obtain more favorable 

terms from private sector reinsurers than from FCIC, this option is 

not available to them. However, if FCIC did not participate as a 

reinsurer, the taxpayer cost of the program could be expressed 

more directly as the total producer premium subsidies in (8) and 

(9). From this perspective, the government’s role in the crop insurance 

program is more clearly understood as ensuring the functioning 

of the market by providing financial support to producers and 

providing incentives to AIPs to ensure that protection is available 

to all eligible producers. 

 

 

 

 

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Other offers include HEADLINE ADVANTAGE, 

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Different qualifying conditions apply for 

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visit GROWERSADVANTAGE.BASF.US. 

Conclusion 

In conclusion, the components of the public costs of the Federal 

crop insurance program are not easy to find and may be interpreted 

in various ways, depending on how the components are aggregated 

and described. Various interpretations may be seen in media 

articles that emphasize the importance of different components, 

such as payments to companies or producer premium subsidies. 

Hopefully, this article will further the understanding of how different 

financial flows in the crop insurance program interact to 

explain overall program costs. 



NCIS Awards 

Two Scholarships 

In the fall of 2011, NCIS began awarding 

two college scholarships to students 

enrolled at an 1890 Land-Grant University. 

The purpose of the scholarships is to help 

students further their education but also 

expose them to the business of crop 

insurance. 

Paige Liggens 

The first recipient is Paige Liggens, a 

student from Langston University in 

Langston, Oklahoma. Miss Liggens is a junior 

majoring in Natural Resource 

Management. She is very active on and off 

campus with various organizations, clubs, 

performance groups and community service. 

Miss Liggens also mentors children 

through local schools and sports programs. 

“Miss Liggens shows great interest in 

learning and is enthusiastic in classroom 

question and discussion sessions,” said Dr. 

Steve Zeng, chair of the Department of 

Agriculture & Natural Resources. “I strongly 

endorse her for this scholarship because 

she has demonstrated scientific intelligence, 

sound study habits, hard-working 

nature and team-oriented skills.” 

Miss Liggens is extremely appreciative 

of this tremendous scholarship and said 

“By awarding me the National Crop 

Insurance Services scholarship, you all 

have lightened my financial burden, which 

allows me to focus more on the important 

aspects of school i.e. learning and studying. 

12 FEBRUARY 2012 

Megan Sullivan 

Your generosity has inspired me to help others 

give back to the community. I hope one 

day I will be able to help students achieve 

their goals just as you have helped me.” 

Miss Liggens had to delay her dream of 

obtaining a college education for a few 

years after high school graduation. She 

worked several jobs to help support her 

family and save money for tuition. 

Langston University, established in 

1987, is named after John Mercer Langston, 

a black educator from Virginia who organized 

the first department of law at Howard 

University. Langston University offers several 

degrees including agriculture and 

applied science, business, education and 

nursing. Over 3,000 students attend the 

university. 

Megan Sullivan is the recipient of the 

second NCIS scholarship. Miss Sullivan is a 

junior at Alcorn State University majoring in 

Homeland Security Science Technology 

with a concentration in Geographic 

Information Science. 

“Miss Sullivan’s leadership qualities are 

outstanding and she is able to initiate discussions, 

ideas, and constructive suggestions,” 

said Dr. Yaw Twumasi, assistant 

professor, GIS and Remote Sensing. “She 

possesses excellent oral and written communication 

skills.” 

Born in Vicksburg, Mississippi, Miss 

Sullivan is the oldest of three children. She 

has always enjoyed learning and after earning 

her bachelors would like to pursue a 

master’s degree. She has had several 

opportunities to participate in programs 

that further her education. Recently she 

participated in the NASA Langley 

Aerospace Research Summer Scholarship 

(LARSS) Project where she researched GIS 

techniques in environmental safety and climate 

change throughout the U.S. Her goal 

is to become a GIS programmer/analyst 

specializing in agricultural science. 

Alcorn State University is the oldest 

public historically black land-grant university 

founded in 1871. More than 3,800 students 

attend this university with three campuses 

located in Southeast Mississippi. 

Students can receive undergraduate and 

graduate degrees in seven different schools 

including arts and sciences, agriculture and 

applied sciences, nursing and education.

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2012 

Spring Update Conference 

The 2012 Spring Update Conference 

held November 9-10, 2011, had a record 

attendance. It was easy to see why when 

you looked at the agenda and saw the 

guest speakers and topics covered. 

Michael Scuse, USDA Acting Under 

Secretary for Farm and Foreign Ag 

Services, was the first guest speaker to 

address the packed conference room. “The 

future for American agriculture and rural 

communities is bright. The most important 

thing we can do is to provide them [farmers] 

with the very best crop insurance 

product we can,” he said. 

This national conference is designed for 

NCIS training contacts and company training 

personnel, with the overall objective to 

provide trainers with updated technical 

information and training materials needed 

to prepare and conduct their company 

spring training for the 2012 crop year. 

In addition to covering the myriad of 

updates to policies and procedures, this 

conference also addressed recent major 

announcements by the Risk Management 

Agency. Trend Adjusted Actual Production 

History (APH) was released by RMA in 

mid-October for corn and soybean policies 

in select counties in 14 Midwestern states. 

Dr. Bruce Sherrick, from the University of 

Illinois where Trend Adjusted APH was 

developed, presented aspects of the 

research and analysis that went into the 

product’s development and provided several 

examples that company trainers can 

use when explaining the new program to 

agents. 

RMA also recently introduced several 

new pilot programs for the industry. As the 

developer of a few of these, Alex 

Michael Scuse, Deputy Under Secretary, 

USDA 

Offerdhal, with Watts & Associates, 

explained the new popcorn revenue and 

specialty soybean revenue pilot programs. 

Ron Lundine, with RMA, discussed the new 

pistachios, olives and camelina policies. 

NCIS staff, including Chris Lindsay, Lisa 

Cain, Michael O’Connor, Dean Strasser, 

Lynnette Dillon, Loretta Sobba and Don 

Hutsell presented changes on the Crop 

Insurance Handbook, other crop policies 

and procedural changes – including crophail, 

actuarial updates, Written Agreement 

Handbook, the Loss Adjustment Manual, 

and a handful of other topics. 

With the deadline of the Congressional 

Super Committee approaching shortly after 

the conference, NCIS invited Mary Kay 

Thatcher, American Farm Bureau 

Federation, to speak on the status of the 

2012 Farm Bill. At that time, the ranking 

members of the House and Senate 

Agriculture Committees were working 

Dr. Bruce Sherrick, University of Illinois 

feverishly to write what was, in essence, 

the 2012 Farm Bill in the hopes of presenting 

it to the Super Committee for inclusion 

in their final legislation to reduce the federal 

deficit by $1.2 trillion dollars. Miss 

Thatcher gave a quick overview of the proposals 

that were introduced by various 

farm organizations in the hopes that the 

crop insurance program would be maintained 

or strengthened. (Ultimately the 

Super Committee did not reach an agreement 

on their proposal by the statutory 

deadline so Farm Bill discussions will continue 

with the hopes that a new legislation 

will be finalized prior to the expiration of 

the current 2008 Farm Bill in September 

2012.) 

Dr. James Hipple, RMA Strategic Data 

Acquisition and Analysis (SDAA), provided 

an overview of the large claim forensic 

remote sensing that is being conducted to 

promote program integrity. Through the 


use of satellite imagery, a series of compliance-related 

activities are being pursued to 

aid the AIPs in loss verification. 

Michael Hand, Deputy Administrator, 

RMA Compliance Division, discussed a 

litany of current compliance issues and 

highlighted lessons learned from conducting 

large claims and routine data mining 

reviews. He also looked ahead to challenges 

for 2012 compliance, including 

more and better data for internal and external 

content, and the continuing Federal 

budget constraints. 

The conference ended with a panel discussion 

on miscellaneous issues and Q&A 

with representatives from RMA and NCIS. 

This time is used for conference presenters 

to supply answers to questions that came 

up during their presentation and needed 

further study or clarification from RMA. 

Participants at the 2012 Spring Update Conference 

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Committee Sees Research 

First Hand 

By Therese Stom, NCIS 

In November of 2011, the NCIS Crop- 

Hail Actuarial & Statistics (A&S) Committee 

traveled to Chandler, Arizona, for an offsite 

meeting. The Crop-Hail A&S Committee 

generally meets twice a year and is responsible 

for the review of crop-hail actuarial 

methodologies, crop-hail statistical reporting 

techniques and state insurance department 

filing requirements. 

While in Arizona the Committee had the 

opportunity to go beyond the meeting 

room and see firsthand what goes on in the 

field. Sam Wang of the Maricopa Ag Center 

provided a tour of cotton fields at the 

research center. Mr. Wang briefed the 

group on some of the research currently 

being conducted. Due to the difference in 

the cotton growing season, there had been 

concern that the loss adjusting charts for 

cotton may not be accurate for the Arizona 

area since the original research for the 

Committee member Dale Farnham (far left) and Tom Vetter, ProAg and member of the NCIS 

Crop-Hail Policy, Procedure and Loss Adjustment Committee, listen to Dr. Wang (far right) 

describe current research projects. 


Dean Clarke, Rachel Henke, Brian Gugat, Mary Sutton and Mike Hargrove 

Frank Schnapp, NCIS (far left), Mary Wandro and Kendall Jones 

charts were conducted in Arkansas and 

Mississippi. Research is being conducted 

on the limb removal and cutoff portions of 

the charts. 

Committee members attending the 

meeting included: Jim Aldeman, 

American Farm Bureau Insurance; Dean 

Clarke, Great American; Dale Farnham, 

Farmers Mutual Hail; Brian Gugat, Rain 

and Hail; Mike Hargrove, ARMtech; 

Rachel Henke, NAU Country; Kendall 

Jones, ProAg; Mary Sutton, RCIS; and, 

Mary Wandro, Grinnell Mutual. Members 

unable to attend were: Greg Livingston, 

John Deere Risk Protection; and, Geoff 

Redman, ADM. 

Therese Stom, NCIS and staff liaison to the 

Crop-Hail A&S Committee 



Trade Talk 

2011 

The 67th annual convention of the 

National Association of Farm Broadcasting 

(NAFB) was held in Kansas City, MO, 

November 9-11, 2011. The “centerpiece 

event” of the convention is Trade Talk. 

Trade Talk affords company and organization 

participants access to member broadcasters 

to discuss the issues and topics that 

are important to them. 

NCIS participated in Trade Talk this 

year and met with several broadcasters to 

discuss crop insurance and its strengths as 

the linchpin of the farm safety net. 

“It was a good use of our time,” said 

Laurie Langstraat, NCIS. “Not only did we 

visit with several farm broadcasters, it 

allowed us the opportunity to network 

with our peers from other commodity and 

farm organizations.” 

“We have heard again and 

again from producers that 

crop insurance is the best risk 

management tool available.” 

Miss America 2011, Teresa Scanlan, spokesperson for “The Hand That Feeds U.S.” stopped by to 

visit our booth. The crop insurance industry is a proud supporter of THTFUS, and we welcomed 

the opportunity to visit with Miss America, who is helping to promote the importance of agriculture. 

In the picture, left to right: Laurie Langstraat, Keith Collins, Miss America, and Tom Zacharias. 

-Senators Frank Lucas 

and Pat Roberts 

“I’m very opposed to cutting 

more from crop insurance.” 

-Representative 

Collin Peterson 

“Most farmers now see crop 

insurance as a primary tool 

for risk management.” 

-USDA Chief Economist, 

Joseph Glauber 

Keith Collins (left) visits with a farm broadcaster during Trade Talk. 


The NCIS booth at Trade Talk featured several positive quotes from key congressional and USDA representatives. 

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Ben Latham 

Retirements 

Jess “Ben” Latham III, will retire from 

The ProAg Insurance Group in early 2012. 

Ben is a graduate of the University of 

Texas and West Texas State University. He 

started his career in crop insurance in 1972 

as an agent in Amarillo, Texas. In 1974, he 

went to work as a hail adjuster for his 

grandfather’s company, which was started 

in 1926. In 1979, he was promoted to Vice 

President of Marketing for the company, 

then a regional crop-hail insurer mostly in 

the state of Texas. In the late 1980s, they 

moved into the MPCI market. 

As the company began to grow, they 

put together a business plan to expand 

into other states. During the 1990s, Ben, 

his brother, and his two sons worked on 

establishing other offices, growing through 

the 2000s to five regional offices and 450+ 

employees in 42 states. During that time, 

Ben served as COO and CEO and enjoyed 

Steve Harms 

Steve Harms, Rain and Hail L.L.C., 

retired in early January 2012, after almost 

37 years of service. Steve had been the 

Chairman of the Board of Rain and Hail 

Insurance Service, Inc. since 2005, and also 

served as President of the Company since 

2001. 

Steve began his career with Rain and 

Hail as an adjuster in 1973 and throughout 

his career there served in several different 

positions such as Field Supervisor, 

Claims/Quality Control Manager, Division 

Manager, Executive Vice President, 

President and Chairman of the Board. 

Steve was also a member of many industry 

committees during his time with Rain 

working with reinsurance and especially 

new employees. 

“We have been very fortunate to have 

put together an excellent management 

team that is with us today at The ProAg 

Insurance Group,” said Ben. “Along with 

its parent company, CUNA Mutual, they 

will continue carrying on the family tradition.” 

During his tenure with The ProAg 

Insurance Group, Ben was very active in 

industry activities and served on several 

Boards, including: National Crop Insurance 

Services (member and Chairman); 

American Association of Crop Insurers 

(member and Chairman); and, the 

International Association of Crop Insurers. 

Ben was also very active in his community, 

serving on several boards for local 

hospitals, churches and other educational 

institutions. 

and Hail. He is a proven leader within the 

agricultural insurance world and had 

served as Chairman of both National Crop 

Insurance Services (NCIS) and American 

Association of Crop Insurers (AACI). 

Steve’s personal life is full of interests, 

activities and friends, but his greatest joy 

and accomplishment is his family. Steve 

and his wife, Diane, have four daughters 

and one son. He enjoys time with his 

grandchildren as well as hunting and fishing. 

We wish Steve all the best in his retirement 

and we thank him for his years of 

service and many contributions to the crop 

insurance industry. 

Ben and his wife, Connie, have three 

children; Benson, Brandon and Jessica. We 

wish Ben all the best in his retirement and 

we thank him for his years of service and 

many contributions to the crop insurance 

industry. 


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TODAYOBITUARIES 

In Memory 

Patrick “Pete” Flanagan, 69, passed away 

at his home in Fort Benton, MT, on 

December 27, 2011, after a long battle with 

cancer. 

Pat was born December 30, 1941 in 

Forsyth, Montana to Pat and Edna 

Flanagan. He grew up on a farm with two 

older sisters, Patricia (Trick) Groombridge 

and Margaret (Muzz) Noctor. He was a first 

generation Irishman who embraced his heritage, 

including a trip to his father’s homestead 

in Ireland. Pat graduated from Forsyth 

High School as an outstanding athlete and 

forever friend. He went to school at NMC 

and EMC on athletic scholarships and graduated 

with a History/Coaching degree. His 

first job took him to Willow Creek, where 

he met and married Walleyne Murphy on 

December 27, 1966. 

Together the Flanagans taught and 

coached at Willow Creek, Hysham, Stanford 

and Fort Benton where they made their 

home. After getting his Master’s degree at 

MSU, Pat touched the lives of many as a 

school counselor and psychologist. He 

especially enjoyed the company of his 

teaching colleagues and later his students 

and players as friends. Pat was a wellloved 

teacher, coach, counselor and friend. 


After retirement in 1992, Pete went to 

work as a crop insurance adjuster for 

AgroNational. He loved his job and the 

people with whom he worked. He made 

many lasting friendships and was a highly 

respected adjuster. Pat learned the skills 

needed to adjust both crop-hail and MPCI 

claims, later becoming a valued claims 

supervisor based on his leadership abilities. 

“His commitment and passion for teaching, 

mentoring and helping people will be 

long remembered by those he touched,” 

said Kim Gibson, Agro Branch Manager and 

Vice President, NAU Country. “Pat was a 

great example of ‘you get what you give’ 

and he gave us all so much; he will be greatly 

missed.” 

Pat became very active in NCIS regional/state 

committee functions in 1997 and 

served as Chairman of the Montana 

Regional/State Committee in 2004-2005. He 

always devoted time and effort for these 

committee activities and felt that by working 

with the industry as a whole we were all 

better served than putting yourself or individual 

company ahead of the industry. 

“Pat demonstrated time and again that 

he was very committed to seeing that the 

Montana Committee remains viable and 

strong,” said Dean Strasser, NCIS and staff 

liaison to the Montana Regional/State 

Committee. “He placed a high value on 

attendance at the Committee’s regularly 

scheduled meetings and loss adjuster 

schools. Hardly a meeting went by that his 

name was not mentioned because he volunteered 

to take on a task or report on an 

issue.” 

Pat, an avid sports fan, was a lifelong 

Dodger supporter. He and his son were on 

a quest to visit ballparks and scored eight. 

He enjoyed skiing, fishing and hunting and 

bagged a 6 by 7 bull on opening day this 

fall. Pat was a wonderful “builder;” building 

a home, a cabin, a redwood canoe, a 

gazebo and a lifetime of memories and 

friendships. 

Time spent with his children Casey, 

Bridget, grandchildren Killian 16, Will 14, 

Connor 10 and many friends were deeply 

cherished and will be greatly missed. 

Friendship, loyalty, laughter and love were 

the gifts Pat gave and continues to give. 

As his best buddy Connor said, “He had a 

good run.” 

A Celebration of Life was held December 

30, 2011 on Pat’s 70th birthday. The family 

suggests gifts to local charities: Chouteau 

County Cancer Support Group, PO Box 674; 

The Dedman Foundation, PO Box 1282; or, 

ICC Restoration, PO Box 849, all of Fort 

Benton Montana 59442.


In Memory 

Patrick “Pete” Flanagan, 69, passed away 

at his home in Fort Benton, MT, on 

December 27, 2011, after a long battle with 

cancer. 

Pat was born December 30, 1941 in 

Forsyth, Montana to Pat and Edna 

Flanagan. He grew up on a farm with two 

older sisters, Patricia (Trick) Groombridge 

and Margaret (Muzz) Noctor. He was a first 

generation Irishman who embraced his heritage, 

including a trip to his father’s homestead 

in Ireland. Pat graduated from Forsyth 

High School as an outstanding athlete and 

forever friend. He went to school at NMC 

and EMC on athletic scholarships and graduated 

with a History/Coaching degree. His 

first job took him to Willow Creek, where 

he met and married Walleyne Murphy on 

December 27, 1966. 

Together the Flanagans taught and 

coached at Willow Creek, Hysham, Stanford 

and Fort Benton where they made their 

home. After getting his Master’s degree at 

MSU, Pat touched the lives of many as a 

school counselor and psychologist. He 

especially enjoyed the company of his 

teaching colleagues and later his students 

and players as friends. Pat was a wellloved 

teacher, coach, counselor and friend. 


After retirement in 1992, Pete went to 

work as a crop insurance adjuster for 

AgroNational. He loved his job and the 

people with whom he worked. He made 

many lasting friendships and was a highly 

respected adjuster. Pat learned the skills 

needed to adjust both crop-hail and MPCI 

claims, later becoming a valued claims 

supervisor based on his leadership abilities. 

“His commitment and passion for teaching, 

mentoring and helping people will be 

long remembered by those he touched,” 

said Kim Gibson, Agro Branch Manager and 

Vice President, NAU Country. “Pat was a 

great example of ‘you get what you give’ 

and he gave us all so much; he will be greatly 

missed.” 

Pat became very active in NCIS regional/state 

committee functions in 1997 and 

served as Chairman of the Montana 

Regional/State Committee in 2004-2005. He 

always devoted time and effort for these 

committee activities and felt that by working 

with the industry as a whole we were all 

better served than putting yourself or individual 

company ahead of the industry. 

“Pat demonstrated time and again that 

he was very committed to seeing that the 

Montana Committee remains viable and 

strong,” said Dean Strasser, NCIS and staff 

liaison to the Montana Regional/State 

Committee. “He placed a high value on 

attendance at the Committee’s regularly 

scheduled meetings and loss adjuster 

schools. Hardly a meeting went by that his 

name was not mentioned because he volunteered 

to take on a task or report on an 

issue.” 

Pat, an avid sports fan, was a lifelong 

Dodger supporter. He and his son were on 

a quest to visit ballparks and scored eight. 

He enjoyed skiing, fishing and hunting and 

bagged a 6 by 7 bull on opening day this 

fall. Pat was a wonderful “builder;” building 

a home, a cabin, a redwood canoe, a 

gazebo and a lifetime of memories and 

friendships. 

Time spent with his children Casey, 

Bridget, grandchildren Killian 16, Will 14, 

Connor 10 and many friends were deeply 

cherished and will be greatly missed. 

Friendship, loyalty, laughter and love were 

the gifts Pat gave and continues to give. 

As his best buddy Connor said, “He had a 

good run.” 

A Celebration of Life was held December 

30, 2011 on Pat’s 70th birthday. The family 

suggests gifts to local charities: Chouteau 

County Cancer Support Group, PO Box 674; 

The Dedman Foundation, PO Box 1282; or, 

ICC Restoration, PO Box 849, all of Fort 

Benton Montana 59442.


In Memory 

Marx M. Mannberger, long-time NCIS 

employee, passed away on December 24, 

2011, at the age of 83. 

Marx began his career with the Crop 

Hail Insurance Actuarial Association 

(CHIAA) in 1956 and retired from NCIS in 

1998. During his tenure with NCIS he held 

several positions, including assistant to the 

director of data processing; data processing 

customer support; data processing 

administrator; and, vice president of data 

processing. 

Marx is survived by his daughter, 

Melanie Cravens of Dresden, TN; one son, 

Mike Mannberger of Greenfield, TN; three 

grandchildren; and, three great-grandchildren. 

He was preceded in death by his 

daughter, Melia Mannberger. 

INDUSTRY 

NCISAWARDS 

Under the direction of its Board of 

Directors, National Crop Insurance 

Services has developed two national 

awards to be given to individuals who 

achieve excellence in the criteria set out by 

the awards. 

The first award is the Outstanding 

Service Award. This award, primarily for 

agents, has actually been in existence since 

2001 and has been awarded to several 

excellent individuals. The purpose of this 

award is to promote exceptional service 

industry-wide, and encourage outstanding 

outreach efforts to all farmers, especially 

limited-resource farmers, by highlighting 

an individual who has demonstrated 

exceptional service. 

The newest award established is the 

Industry Leadership Award. This award, 

targeted primarily to members of the NCIS 

regional/state crop insurance committees, 

was created to formally recognize individuals 

who are directly involved in the crop 

insurance industry and who consistently 

serve the industry by providing outstanding 

leadership. Company employees at both 

the field and management level are eligible 

to be nominated. 

The criteria for both awards are: 

1. Strong personal and business ethics. 

2. Demonstrated service above and 

beyond to the crop insurance industry. 

3. Represents themselves, their company, 

and the crop insurance industry well. 

The two winners will be presented with 

their awards at the crop insurance industry 

annual convention held in February of 

each year. 

All nominations must be submitted in 

writing to NCIS by October 15, 2012, for 

awards to be given at the 2013 Annual 

Convention. For nomination information 

and forms to be submitted, please go to 

the NCIS website at www.ag-risk.org to 

download. If you have any questions 

regarding the criteria or whom is eligible 

for either award, please contact Laurie 

Langstraat at NCIS at lauriel@ag-risk.org or 

913-685-2767. 



STEP 5-TESTING THE CURRENT FARM 

Q:Will the current farm be 

feasible in the future? 

This is the fifth in a ten-part series of articles on “The Steps of Farm Business Planning.” 

The introductory article for the series was published in the November 2010 issue of Crop Insurance TODAY ® and additional articles 

will be printed each quarter. 

By Dr. Laurence Crane, NCIS 

3), and set and prioritize your personal and 

business goals (Step 4). 

If the analysis indicates that the current 

farm does not need to be changed (and 

you are not interested in pursuing 

changes), Steps 6 and 7 of the planning 

process can be skipped. But if the analysis 

suggests that changes should be considered 

(or you are interested in exploring 

options), Steps 6 and 7 outline some 

thoughts on describing and evaluating 

alternatives. 

The first sections of this step provide an 

overview of the analytical process. 

Subsequent sections address several issues 

that arise in completing the analysis and 

suggest actions that can be taken, based 

on the result of the analysis. 

Analytical Procedure 

The question to be answered by completing 

this step is whether the current 

An important part of planning is understanding 

what will happen if you don’t 

change anything. Evaluating the future 

performance of your current farm, based 

on your assumptions and expectations for 

the future, will help you to know if and 

when changes are needed. This evaluation 

will provide the base, or benchmark, on 

which to measure the effectiveness of 

potential changes. 

The object of this step is to determine 

whether the current farm operation will 

meet your goals in the future, or whether 

changes should be made to your current 

farm business. In the previous four steps 

you had the opportunity to describe your 

current farm operation (Step 1), identify 

your skills and interests (Step 2), specify 

your expectations about the future (Step 


farm business, with no more than minor 

changes, will fulfill your personal and 

business goals in the future. To conduct 

the test, you should: 

a. Use the description of the current 

farm as developed in Step 1 and the 

expected future prices and costs that 

were specified in Step 3; 

b. Apply the analytical process 

described in Step 1; that is, project 

the farm business’ cash flow, profitability, 

equity accumulation, and 

resource feasibility several years in 

the future; 

c. Compare the projections to the long 

term business goals set forth in Step 

4; and, 

d. Compare the tasks needed to operate 

the farm to the interests and skills the 

owners want to pursue (as set forth 

in Step 2). 

The next several sections of this section 

expand on certain aspects of the 

analytical process. 

Projections 

Remember, the focus of this step is on 

the future performance of the current 

farm; that is, projecting the financial performance 

of the current business based on 

the assumptions you made about the 

future. The procedure is similar to what 

was utilized in Step 1: 

• An enterprise budget is developed for 

each activity; 

• The enterprise budgets are combined 

to gain an understanding of the wholefarm; 

and, 

• A determination is made as to how well 

the availability of resources matches 

with resource needs. 

The period of time being analyzed is 

the future (rather than the past), and 

such projections often are referred to as 

budgets. 

Time Frame 

Another issue in testing your current 

farm operation is selecting the time periods 

to be analyzed. Many farmers start by 

testing their business for next year and 

usually are quite confident that their 

assumptions are realistic. 

However, farm business planning 

emphasizes a longer time period. To look 

further into the future, most farmers select 

a second time period; perhaps five or ten 

years from now. Preparing projections 

beyond one year encourages you to think 

more broadly but it also complicates the 

analysis due to increased uncertainty 

about your assumptions as the time period 

is extended. 

Most farmers are already implicitly 

making these long term assumptions even 

though they may not share or document 

them. For example, when a farmer purchases 

a machine, he has some expectations 

as to the value of the future productivity 

of the machine. However, many individuals 

may feel uncomfortable explicitly 

specifying their assumptions by writing 

them down because time may prove them 


wrong. But no one can foresee the future 

and if someone’s projection turns out to 

be fairly accurate over time, it probably 

was good fortune as much as unique 

insight. Individuals should be encouraged 

to talk about their vision for the future. It 

is only through the sharing of ideas that 

owners of the farm can build on one 

another’s foresight, and collectively be 

better prepared for the future. 

One suggestion for selecting the time 

periods for analysis is to have them align 

with the periods followed in describing 

the future (Step 3) and setting deadlines 

for goals (Step 4). By using the same time 

periods, the pieces of information fit more 

closely. 

For example, a farmer may want to 

specify assumptions for five years from 

now (Step 3), goals for five years from now 

(Step 4), and then project the performance 

of the current farm for five years from now. 

Such a consistent time frame allows the 

assumptions to be used directly in making 

the projections, which in turn, can be 

directly compared to the goals. 

Most farmers will have two or more 

time periods in mind as they complete 

this step of the planning process-next year 

and several years into the future. 

Which Changes Should 

be Considered in this 

Analysis? 

Because this step involves projecting 

the future performance of the current 

farm operation, the analysis assumes the 

farm will not change over the time period 

being evaluated. There will be no change 

in the commodities being produced, the 

acreage being operated, nor the production 

and marketing strategies being followed. 

Only prices and costs are allowed 

to vary in this analysis, and those variations 

were specified as part of Step 3. 

New production techniques or marketing 

strategies and changes in the commodities 

being produced should be analyzed as 

alternatives (Step 6) of the planning 

process. 

This strict limitation should help you 

recognize even minor changes that you 

make in your farm operations. A concern 

is that a series of minor changes can have 

an impact similar to a major change. If 

only major changes are analyzed, a series 

of unanalyzed minor changes may collectively 

result in a major change that has not 

been analyzed. Therefore, one goal of 

business planning is to help you recognize 

and evaluate even relatively minor 

changes. Imposing such a limit on the 

types of changes in this analysis should 

reveal minor, as well as major, changes 

that you need to address. 

An exception to this strict limitation 

against change is those changes that occur 

due to the passage of time. For example, 

the passage of time alters the availability 

and productivity of labor—young people 

grow more productive while older individuals, 

transitioning toward retirement, may 

be less available. Likewise, as equipment 

ages some items will likely need to be 

replaced in order to maintain the farm’s 

current productive capacity. For example, 

if one machine is replaced with a machine 

of identical capacity, it is probably a minor 

change. However, the implications of that 

purchase on the farm’s cash flow should 

be analyzed. Another example of an 

inevitable change may be paying down 

long term debt. 

But which changes should be analyzed 

as part of the current farm and which 

changes should be considered alternatives 

to be analyzed in the next step of the business 

planning process? Rather than list the 

types of changes that may fit in each category, 

it may be more helpful to specify a 

criterion that can applied. One criterion 

for deciding which changes to incorporate 

into this analysis would be to distinguish 

between: 

• Changes resulting from the passage of 

time, unintentional changes; or, 

• Changes that result from a reactive 

management style; or, 

• Changes that occur intentionally, or 

that result from a proactive management 

style. 

The first type of changes could be 

incorporated into this step as part of the 

current farm, whereas other types of 

changes could be tested as alternatives 

(Step 6). 

This criterion would distinguish 

between: 1) the changes that occur as a 

farmer grows older while continuing the 

same enterprises and making only minor 

required changes; and, 2) changes made 

to enhance, expand, replace, or redirect 

the farm operation. The criterion could be 

restated as changes resulting from “rolling 

with the punches” compared to changes 

arising from “taking the bull by the 

horns.” 

Many farmers expect that they will 

need to make more than minor changes 

in their farm operations, particularly in 

the long run. They may envision involving 

a new co-owner, adding or changing 

enterprises, adjusting the scale of operation, 

or adopting new production technologies 

and marketing strategies. 

Despite such expectations and recognizing 

the need to evaluate alternatives, it is 

imperative that the current farm should 

be analyzed so the results can serve as a 

benchmark against which alternatives can 

be compared. 

Preparing Enterprise 

Budgets 

A beginning step in projecting the 

future performance of the farm business is 

to prepare an enterprise budget for the 

future time period. You can use enterprise 

analysis (developed in Step 1) but substitute 

expected prices (from Step 3) to project 

revenue and costs. This procedure 

allows you to understand the profitability 

and feasibility of continuing each enterprise 

without change. 

Testing the Whole Farm: 

Resource Match 

The next component of the evaluation 

is to develop a projection for the whole 

farm in terms of resource feasibility, profit, 

cash flow, and the other standardized 

financial measures. 

Resource availability and needs can be 

analyzed with the same techniques 

described in Step 1. However, you should 

not need to emphasize testing the 

resource match during this step because 

of the limitation (as described above) that 

there will be no major changes to the 

business. This assumption implies that 

there will be no additional or no fewer 

resources, and that resource needs will 


not change either. Existing resource shortages 

or surpluses (as identified in Step 1) 

will presumably continue into the future. 

The primary exception to this assumption 

is that family labor will change as individuals 

grow older. 

Testing the Whole Farm: 

Financial Feasibility 

Another critical aspect of projecting the 

performance of the whole farm for a future 

time period is to analyze the business’ 

financial feasibility. This analysis involves 

preparing the three basic financial statements—income 

statement, cash flow, and 

balance sheet—for the future period. Like 

the enterprise budgets described in a preceding 

paragraph, these are projections, 

rather than reports of past activities, and 

are referred to as pro forma financial statements. 

Outcomes for this evaluation 

should include: 

• A budget for each enterprise to project 

its future profitability and cash flow for 

that year; 

• A pro forma income statement for the 

whole farm; 

• A pro forma cash flow for the whole 

farm for the year (a monthly or quarterly 

cash flow projection might be difficult 

to develop, highly speculative, and possibly 

not that helpful because the timing 

of the cash flows are perhaps most critical 

only for one year at a time since 

most operating loans are arranged for 

only one year at a time); 

• A projected change in equity (by either 

preparing a pro forma balance sheet or 

estimating projected profit minus family 

living); and, 

• An assessment of how well your goals 

are being met, including whether your 

activities align with your skills and interests, 

and whether an acceptable rate of 

return is being earned for your labor 

and investments. 

Criteria for Deciding 

Whether Current 

Business 

is Adequate 

After preparing the projections you 

must decide whether the current operation, 

with no more than minor changes, 

will be adequate in the future. It is at this 

point that the first five steps of the planning 

process unite into a single thought 

process. 

How do the projections (as just completed 

in Step 5) of operating the current 

farm (as described in Step 1) in the future 

(as you envisioned it in Step 3) align with 

your likes and dislikes (as specified in 

Step 2) and fulfill your goals (as set forth 

in Step 4)? 

You can consider questions such as 

whether the projected profit is adequate; 

whether the business will generate sufficient 

cash flow; whether the activities sufficiently 

align with your interests; and,

whether the projected performance adequately 

fulfills your goals. No one else 

can make that decision but you. The specific 

criteria will differ with each person, 

and the goals, as set forth in Step 4, 

should express the primary criteria for 

this decision. The following list suggests 

several questions that can be used as criteria 

for deciding the future adequacy of 

the current business. 

• Would the current business, with no 

changes, be satisfactory five years 

from now? 

• Would the business be profitable? 

• Would the business generate the necessary 

or desired cash flow? 

• Would the owner equity be changing 

as desired? 

• Would the business fulfill your personal 

and business goals (Step 4)? 

• Would the business permit you to pursue 

activities that you are skilled and 

interested in (Step 2)? 

• Would the risk exposure align with the 

business’ capacity to assume risk (Step 

1) and your willingness to assume risk 

(Step 2)? 

In some situations, owners may decide 

to revisit one or more of the previous 

steps and expand their thoughts or analysis, 

recognizing that the additional effort 

will enable them to more confidently 

answer the preceding questions. 

If You Decide Your 

Current Farm is 

Adequate 

There are some steps you may want to 

take even though you decide that the current 

farm will be adequate to fulfill your 

goals into the future. The questions may 

include: 

• Can the business be operated more 

efficiently? 

• Should the plans for how the business 

is operated be enhanced? 

• At what point will the current farm likely 

become inadequate to meet my needs? 

Testing Efficiencies 

One question you may pose for yourself 

at this point might be, “Could I do a 

better job of accomplishing my goals even 

if I do not intend to change the operation?” 

One criterion for answering that 

question is whether additional revenue 

generated by making the change exceeds 

the cost of making the change. If the 

answer is yes, additional profit would 

result from the change; if the answer is no, 

the farm operation would earn greater 

profit by not making the change. This 

question and various ways of expressing 

the criteria are explained more fully in 

Step 6. 

The criteria described above emphasize 

comparing the projection of the current 

farm to the owners’ goals. Other comparisons 

include: 

• Comparing the projection of the current 

farm to current and historical performance; 

and, 

• Comparing the projection of the current 

farm to performance of peer businesses. 

There are numerous efficiency measures, 

but for most of these measures there 

is no specified absolute standard. For this 

reason, you have to settle for making comparisons 

or other relative measures. The 

issue of efficiency is addressed again in 

Step 6 (Identifying Alternatives) and Step 

9 (Monitoring and Control). 

Revising Functional Plans 

Another action that you can take if you 

decide that your current operation is adequate, 

is to refine your functional plans; 

that is, your strategies for production, marketing, 

labor management, risk management, 

and capital needs. For example, you 

may ask whether the strategies can be 

improved even though no major modifications 

are envisioned. 

A similar question that you could ask 

yourself would be whether you understand 

your functional plans well enough 

to explain them to someone else so they 

could implement those plans. Along the 

same line, do you recognize your assumptions 

so you are prepared to alter your 

plans if the assumptions turn out to be 

invalid. These and similar questions 

should enhance efforts to improve current 

functional plans. 

Managing risk and preparing for unexpected 

occurrences are two tasks farmers 

engage in even if their long-term plans do 

not include major changes. Step 8 provides 

ideas you may want to consider in 

developing contingency plans for managing 

in an environment of uncertainty. Step 

6 and Step 7 can be bypassed if there is no 

need to consider major changes in the 

farm business. 

If You Decide Your 

Current Farm is 

Inadequate 

If you decide that your current farm 

business is not adequate to meet your 

future needs, you will want to develop 

and test some alternatives. Step 6 

(Identifying and Evaluating Alternatives) 

and Step 7 (Transitional Plans) offer suggestions 

you may want to explore in 

developing a farm business that better 

meets your interests and goals. 

The first activity in developing alternatives 

is to describe (as explained in Step 6) 

how the current farm is inadequate. The 

shortcomings might be an inadequate cash 

flow, an unsatisfactory return to the owners’ 

labor, or having to forego goals that 

you consider important. By describing 

these shortcomings, you are setting forth 

ideas to help assess whether the alternatives 

are better than their current practices. 

Conclusion 

The purpose of this step is to determine 

whether the current farm operation 

will meet your future needs based on your 

assumptions and expectations about the 

future, and your statements about your 

interests and goals. The test involves 

developing projections of future performance 

for several time periods into the 

future. 

If the current farm appears to be satisfactory 

for the future, you may still want 

to assess whether the efficiency of the 

operation can be improved or the functional 

plans enhanced. If the current farm 

appears inadequate for the future, you 

will want to consider describing the 

shortcomings, and identify and evaluate 

alternatives. 


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naucountry.com 

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© 2011 NAU 

Country 

Insurance Company. All Rights Reserved. NAU 

Country 

Insurance n 

Company is an Equal 

Opportunity Provider. 

The links logo is a registered service mark of 

QBE Insurance Group, Limited. NAU Country 

is a registered service mark of 

NAU Country Insurance Company.

STATE RANKINGS 

Premiums for Crop-Hail 

STATE 2011 PREMIUMS* 2010 PREMIUMS* % CHANGE 

Nebraska 155,647 103,594 50.25 

Iowa 104,554 79,351 31.76 

Minnesota 79,942 59,562 34.22 

North Dakota 76,296 73,708 3.51 

Illinois 68,955 55,120 25.10 

Kansas 62,523 58,844 6.25 

South Dakota 56,539 37,726 49.87 

Texas 44,052 63,370 -30.48 

Montana 31,610 22,358 41.38 

Indiana 18,125 13,988 29.58 

Missouri 16,303 11,811 38.03 

Idaho 14,926 10,553 41.44 

Colorado 14,696 11,065 32.82 

Wisconsin 14,199 11,409 24.45 

Washington 12,255 9,977 22.83 

Arkansas 11,519 7,488 53.83 

Ohio 8,971 7,033 27.56 

North Carolina 8,888 9,056 -1.86 

Oklahoma 6,725 9,944 -32.37 

Michigan 6,105 5,345 14.22 

Kentucky 4,320 3,438 25.65 

Oregon 3,940 2,481 58.81 

Arizona 3,667 2,255 62.62 

Wyoming 2,466 1,723 43.12 

New Mexico 2,148 1,884 14.01 

Tennessee 2,028 1,424 42.42 

Virginia 1,958 1,700 15.18 

Georgia 1,846 1,246 48.15 

California 1,477 1,274 15.93 

Mississippi 921 537 71.51 

Alabama 781 508 53.74 

Florida 459 330 39.09 

Louisiana 317 90 252.22 

South Carolina 294 293 0.34 

New York 152 98 55.10 

Utah 133 54 146.30 

Pennsylvania 108 98 10.20 

New Jersey 53 54 -1.85 

Delaware 47 15 213.33 

Maryland 36 8 350.00 

Nevada 15 17 -11.76 

Massachusetts 2 1 100.00 

West Virginia 1 0 2,595.83 

Connecticut 0 0 0.00 

Main 0 0 0.00 

New Hampshire 0 0 0.00 

Rhode Island 0 0 0.00 

Vermont 0 0 0.00 

Totals 839,995 680,831 23.38 


*Rounded to Thousands 

Data Source: NCIS 6-B Adjusted Verified Totals as of 01/04/2012. 

© National Crop Insurance Services 01/2012.

STATE RANKINGS 

Premiums for MPCI 

STATE 2011 PREMIUMS* 2010 PREMIUMS* % CHANGE 

Texas 1,054,424 627,040 68.16 

North Dakota 1,051,068 664,597 58.15 

Iowa 1,028,534 592,418 73.62 

Illinois 924,711 566,681 63.18 

Minnesota 838,900 524,836 59.84 

Kansas 794,127 543,693 46.06 

Nebraska 757,846 465,885 62.67 

South Dakota 721,206 482,371 49.51 

Indiana 512,647 305,438 67.84 

Missouri 401,342 250,228 60.39 

Ohio 376,586 222,547 69.22 

Wisconsin 293,740 188,429 55.89 

California 239,962 219,251 9.45 

North Carolina 213,483 155,385 37.39 

Colorado 211,893 148,211 42.97 

Montana 211,691 137,416 54.05 

Michigan 208,968 135,253 54.50 

Oklahoma 202,750 132,614 52.89 

Georgia 194,924 122,792 58.74 

Kentucky 153,681 89,921 70.91 

Mississippi 152,845 108,391 41.01 

Arkansas 150,477 110,384 36.32 

Washington 147,339 105,316 39.90 

Tennessee 121,478 76,523 58.75 

Florida 112,514 100,248 12.24 

Louisiana 101,716 77,249 31.67 

Alabama 83,957 52,267 60.63 

Idaho 83,399 62,123 34.25 

South Carolina 76,710 52,313 46.64 

Virginia 74,153 47,006 57.75 

Pennsylvania 66,976 45,175 48.26 

Maryland 45,707 28,379 61.06 

Oregon 43,999 34,658 26.95 

New York 35,912 28,022 28.16 

Arizona 32,818 14,464 126.89 

New Mecico 24,579 17,146 43.35 

Delaware 17,522 11,026 58.92 

Wyoming 17,080 13,774 24.00 

New Jersey 8,952 5,888 52.04 

Maine 8,562 7,525 13.78 

Connecticut 5,004 4,758 5.17 

Utah 4,091 3,261 25.45 

Nevada 3,171 2,530 25.34 

Massachusetts 2,980 3,404 -12.46 

West Virginia 2,723 2,134 27.60 

Vermont 2,365 1,741 35.84 

Hawaii 1,279 1,580 -19.05 

New Hampshire 478 385 24.16 

Rhode Island 95 76 25.00 

Alaska 86 50 72.00 

Totals 11,821,452 7,592,801 55.69 

*Rounded to Thousands 

Data Source: RMA Summary of Business as of 01/02/2012. 

Prepared by © National Crop Insurance Services 01/2012. CROP INSURANCE TODAY 33

Continued from President’s Message 

Approved Insurance Providers (AIPs) and 

their network of federally approved crop 

insurance adjusters? As of January 23, 2012, 

a record $9.1 billion in indemnity payments 

have been made to U.S. farmers. (The previous 

indemnity payment record was $8.67 

billion paid in 2008.) Many believe total 

indemnities will track with total premium, 

resulting in a program loss ratio (total 

indemnities divided by total premium) of 

100 percent. The program has not experienced 

a loss ratio of 100 percent since 2002 

(1.39 loss ratio). 

Is there more to this app? Well, for 

indemnities at $9 billion and counting to be 

paid on 349,702 policies covering approximately 

72 million acres on over 77 crops in 

50 states over a period of 16 months, there 

would need to be extremely reliable highspeed 

data processing systems for both the 

USDA/RMA and the AIPs. Moreover, there 

would need to be a risk sharing mechanism 

between the public and private sector to 

manage a risk of $113.3 billion in total crop 

protection nationwide. This risk sharing 

mechanism includes the participation of the 

private reinsurance sector that provides a 

vital source of capital to the industry, 

enabling the AIPs to write not only $11.8 

billion in premium, but also over $800 million 

in premium in privately delivered crophail 

coverage, which translates to another 


$36.8 billion in crop insurance liability. This 

raises the total liability to over $150 billion 

in crop insurance protection. 

So, how important is this particular app? 

The ability to pay insured losses on a timely 

basis at coverage levels that recoup the 

majority of the cost of production for most 

major field crops mitigates the economic 

necessity and political demands for large 

scale disaster payments at a time when 

Federal coffers are exhausted. Equally 

important are timely and effectual indemnities 

that allow the agricultural production 

sector to finance the 2012 crop. Keep in 

mind that we have been experiencing 

extremely tight supply and demand balances 

for our major agricultural commodities for 

the past several years. THE CAPABILITY OF 

U.S. AGRICULTURE TO SUSTAIN OVER $11 

BILLION IN INSURED LOSSES IN 2011 AND 

SEAMLESSLY FINANCE ITSELF FOR THE 

2012 SEASON SHOULD NOT BE TAKEN 

FOR GRANTED. Sounds like this crop insurance 

program might be a pretty cool app. 

Is the app perfect? Certainly not. We 

would be remiss if we did not consider the 

role or future of next generation apps. In the 

parlance, we do need to routinely “upgrade” 

our app from time to time. What about next 

generation apps? The FCIC Board, in conjunction 

with the staff at RMA, continually 

evaluates new product proposals submitted 

by third party stakeholders. Since 2002 at 

least 23 new products have been submitted 

and approved through this process. RMA is 

also currently implementing and reviewing 

new features associated with its actuarial 

procedures. Although concerns have been 

expressed over this process, the critical issue 

is that RMA and the industry are striving to 

ensure that actuarially sound premiums are 

established to ensure the financial stability of 

the program and provide benefit for the 

farmer. Additionally, RMA and the industry 

are engaged in several initiatives to improve 

the delivery system. 

Well, I think we have pretty much 

exhausted the metaphor here, and I sure 

hope I have made my point. Admittedly, 

my tone can be viewed as somewhat acerbic 

and mildly cynical, but before we proceed 

into the next rendition of the Farm Bill 

debate, and we evaluate a Pandora’s Box of 

alternative agricultural policy choices, let’s 

keep in mind that there is an “app” that 

performs quite well, all things considered. 

Not only does the crop insurance app do 

what it is supposed to do, it has an existing 

institutional framework that can adapt and 

grow in order to perform the necessary 

upgrades required to meet the future risk 

management needs of U.S. agriculture. And 

to the crop insurance industry and the staff 

of the RMA - keep APP the good work. 

Lastly, welcome to the first 2012 issue of 

Crop Insurance TODAY. This issue contains 

an in-depth look at the cost of the Federal 

crop insurance program. Sometimes data 

can be misunderstood or misrepresented as 

to the true costs to taxpayers, and so Frank 

Schnapp and Keith Collins help explain 

how the numbers all work together and 

what they really mean. The magazine also 

highlights various industry activities that 

occurred during the final quarter of 2011. 

With this issue, we are introducing a 

new digital version of the magazine, which 

will allow you to read articles online, 

search for key words, directly link to websites 

listed in resource documentation and 

provides “one click” access for the advertisers. 

And very soon, the magazine will also 

have its own “app.” This app will be iPad 

and Droid friendly and will provide you 

direct access to the digital publication from 

your tablet device. Stay tuned to the online 

version of the magazine for more information 

about when the app is available for 

download!

Continued from President’s Message 

Approved Insurance Providers (AIPs) and 

their network of federally approved crop 

insurance adjusters? As of January 23, 2012, 

a record $9.1 billion in indemnity payments 

have been made to U.S. farmers. (The previous 

indemnity payment record was $8.67 

billion paid in 2008.) Many believe total 

indemnities will track with total premium, 

resulting in a program loss ratio (total 

indemnities divided by total premium) of 

100 percent. The program has not experienced 

a loss ratio of 100 percent since 2002 

(1.39 loss ratio). 

Is there more to this app? Well, for 

indemnities at $9 billion and counting to be 

paid on 349,702 policies covering approximately 

72 million acres on over 77 crops in 

50 states over a period of 16 months, there 

would need to be extremely reliable highspeed 

data processing systems for both the 

USDA/RMA and the AIPs. Moreover, there 

would need to be a risk sharing mechanism 

between the public and private sector to 

manage a risk of $113.3 billion in total crop 

protection nationwide. This risk sharing 

mechanism includes the participation of the 

private reinsurance sector that provides a 

vital source of capital to the industry, 

enabling the AIPs to write not only $11.8 

billion in premium, but also over $800 million 

in premium in privately delivered crophail 

coverage, which translates to another 


$36.8 billion in crop insurance liability. This 

raises the total liability to over $150 billion 

in crop insurance protection. 

So, how important is this particular app? 

The ability to pay insured losses on a timely 

basis at coverage levels that recoup the 

majority of the cost of production for most 

major field crops mitigates the economic 

necessity and political demands for large 

scale disaster payments at a time when 

Federal coffers are exhausted. Equally 

important are timely and effectual indemnities 

that allow the agricultural production 

sector to finance the 2012 crop. Keep in 

mind that we have been experiencing 

extremely tight supply and demand balances 

for our major agricultural commodities for 

the past several years. THE CAPABILITY OF 

U.S. AGRICULTURE TO SUSTAIN OVER $11 

BILLION IN INSURED LOSSES IN 2011 AND 

SEAMLESSLY FINANCE ITSELF FOR THE 

2012 SEASON SHOULD NOT BE TAKEN 

FOR GRANTED. Sounds like this crop insurance 

program might be a pretty cool app. 

Is the app perfect? Certainly not. We 

would be remiss if we did not consider the 

role or future of next generation apps. In the 

parlance, we do need to routinely “upgrade” 

our app from time to time. What about next 

generation apps? The FCIC Board, in conjunction 

with the staff at RMA, continually 

evaluates new product proposals submitted 

by third party stakeholders. Since 2002 at 

least 23 new products have been submitted 

and approved through this process. RMA is 

also currently implementing and reviewing 

new features associated with its actuarial 

procedures. Although concerns have been 

expressed over this process, the critical issue 

is that RMA and the industry are striving to 

ensure that actuarially sound premiums are 

established to ensure the financial stability of 

the program and provide benefit for the 

farmer. Additionally, RMA and the industry 

are engaged in several initiatives to improve 

the delivery system. 

Well, I think we have pretty much 

exhausted the metaphor here, and I sure 

hope I have made my point. Admittedly, 

my tone can be viewed as somewhat acerbic 

and mildly cynical, but before we proceed 

into the next rendition of the Farm Bill 

debate, and we evaluate a Pandora’s Box of 

alternative agricultural policy choices, let’s 

keep in mind that there is an “app” that 

performs quite well, all things considered. 

Not only does the crop insurance app do 

what it is supposed to do, it has an existing 

institutional framework that can adapt and 

grow in order to perform the necessary 

upgrades required to meet the future risk 

management needs of U.S. agriculture. And 

to the crop insurance industry and the staff 

of the RMA - keep APP the good work. 

Lastly, welcome to the first 2012 issue of 

Crop Insurance TODAY. This issue contains 

an in-depth look at the cost of the Federal 

crop insurance program. Sometimes data 

can be misunderstood or misrepresented as 

to the true costs to taxpayers, and so Frank 

Schnapp and Keith Collins help explain 

how the numbers all work together and 

what they really mean. The magazine also 

highlights various industry activities that 

occurred during the final quarter of 2011. 

With this issue, we are introducing a 

new digital version of the magazine, which 

will allow you to read articles online, 

search for key words, directly link to websites 

listed in resource documentation and 

provides “one click” access for the advertisers. 

And very soon, the magazine will also 

have its own “app.” This app will be iPad 

and Droid friendly and will provide you 

direct access to the digital publication from 

your tablet device. Stay tuned to the online 

version of the magazine for more information 

about when the app is available for 

download!

Call 

800-951-6247 

and ask for Donna 

$.20 each, 

plus shipping. 

For orders over 500, please call 

for discounted price. 


The new digital Crop Insurance TODAY® magazine is 

now online. TODAY® is now fully functional as an online, 

interactive publication as well as print. This new digital 

feature will enable NCIS to touch our subscribers with 

timely industry information and updates. Visit www.ag-risk.org 

or www.cropinsuranceinamerica.com to view TODAY® online. 

CropInsTODAY 

There’s an app for that! 

Smartphone mobile and tablet applications coming soon!

2012 CROP INSURANCE CHARTS 

INSURABLE CROPS 

Locations&Plans 

The following pages contain a list of all federally subsidized insurable crops, what states they are insurable in, under what plan(s) 

of insurance, and the number of counties where they are insurable. Please note this information is current as of January 11, 2012. 

Changes are constantly occurring in the crop insurance program and you should contact your crop insurance agent for the most 

up-to-date information. 

The numbers in the matrix refer to specific insurances plans by the plan number as identified by the Risk Management Agency 

(RMA). A number containing a dash indicates that the crop is not insurable in every county in the state. The number following the 

dash represents the number of counties in that state the crop is insurable under the plan of insurance indicated by the number before 

the dash. For example, the code 01-16 means that specific crop is insurable under the Yield Protection (YP) plan of insurance in sixteen 

counties in the state. If the number does not contain a dash, it is insurable in every county in the state. A number including (P) 

indicates a pilot program. 

01 = YP-Yield Protection 

02 = RP-Revenue Protection 

03 = RPHPE-Revenue Protection with Harvest 

Price Exclusion 

04 = GRP-Group Risk Plan 

05 = GRIP-HRO-Group Risk Income Protection- 

Harvest Revenue Option 

06 = GRIP-Group Risk Income Protection 

13 = RI-Rainfall Index 

14 = VI-Vegetation Index 

40 = TDO-Tree Based Dollar Amount of Insurance 

41 = PRV-Pecan Revenue 

43 = AQDOL-Aquaculture Dollar 

46 = ARC-Avocado Revenue Coverage 

47 = ARH-Actual Revenue History 

50 = DO-Dollar Amount of Insurance 

51 = FD-Fixed Dollar 

55 = YDO-Yield Based Dollar Amount of Insurance 

61 = AGR-L-Adjusted Gross Revenue - Lite 

63 = AGR-Adjusted Gross Revenue 

81 = LRP-Livestock Risk Protection 

82 = LGM-Livestock Gross Margin 

90 = APH-Actual Production History 

CV-ComprehensiveTree Value 

QE-Quarantine Endorsement 

PY-Personal T Yield 

PO-Price Endorsement Option 

NS-Stage Removal 

HF-Hail & Fire Protection 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 

North Carolina 

North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

ADJUSTED GROSS 

REVENUE ALFALFA 

SEED 

ALMONDS APICULTURE APPLES 

APRICOTS AVOCADO BANANA 

BARLEY 

BEANS 

BLUEBERRIES 

AGR 

(P)63-8 

(P)63 

(P)63 

(P)63-6 

(P)63-3 

(P)63 

(P)63-21 

(P)63 

(P)63-9 

(P)63 

(P)63 

(P)63-16 

(P)63-11 

(P)63-14 

(P)63 

(P)63 

(P)63-40 

(P)63-11 

AGR-Lite 

61 

61 

61 

61-63 

61 

61 

61 

61 

61 

61 

61 

61 

61 

61,23 

61 

61 

61 

61 

61 

61-20 

61 

61-52 

61 

61 

61-66 

61 

61 

61 

61 

61 

61 

61 

61 

61 

61 

Fresh 

90-13 

90-4 

90-5 

90-7 

Processing 

90-13 

Avocado 

(P)90-6QE 

(P)90-1 

Trees 

(P)40-1CV 

Banana 

(P)90 

Tree 

(P)40 

Dry 

90-2 

90-17 

90-24 

90-12 

90-2 

90-12 

90-28 

90-40 

90-11 

90-25 

90-4 

90-13 

(P)90-36PY 

90-2 

90-13 

90-18 

90-1 

90-6 

90-3 

90-7 

Fresh 

Market 

90-9 

90-4 

90-2 

Processing 

90-2 

90-2 

90-4 

90-2 

90-10 

90-9 

90-15 

90-3 

90-1 

90-18 

90-1 

90-9 

90-15 

90-4 

90-5 

90-2 

90-7 

90-42 

90-1 

90-4 

90-5 

90-12 

90-8 

90-5 

90-8 

90-4 

90-6 

90-7 

90-1 

90-6 

01-4,02-4,03-4 

01-5,02-5,03-5 

01-33,02-33,03-33 

01-32,02-32,03-32 

01,02,03 

01-4,02-4,03-4 

01-43,02-43,03-43 

01-1,02-1,03-1 

01-1,02-1,03-1 

01-7,02-7,03-7 

01-75,02-75,03-75 

01-8,02-8,03-8 

01,02,03 

01-18,02-18,03-18 

01-29,02-29,03-29 

01-74,02-74,03-74 

01-7,02-7,03-7 

01-55,02-55,03-55 

01-18,02-18,03-18 

01-12,02-12,03-12 

01-7,02-7,03-7 

01-4,02-4,03-4 

01-15,02-15,03-15 

01-57,02-57,03-57 

(P)01PY,(P)02PY,(P)03PY 

01-1,02-1,03-1 

01-24,02-24,03-24 

01-30,02-30,03-30 

01-54,02-54,03-54 

01-6,02-6,03-6 

01,02,03 

01-2,02-2,03-2 

01-43,02-43,03-43 

01-25,02-25,03-25 

01-1,02-1,03-1 

01-62,02-62,03-62 

01-38,02-38,03-38 

01-1,02-1,03-1 

01-60,02-60,03-60 

01-18,02-18,03-18 

(P)90-2 

(P)90-2 

(P)90-1 

(P)90-2 

(P)90-1 

(P)90-2 

(P)90-2 

13 

14 

13 

13 

13-48,14-15 

13 

13 

14 

13 

13-23 

13 

13-114 

13 

14 

14 

14 

13 

13 

13 

13 

14 

13 

13 

14 

13 

14 

13-98 

13 

14 

90-16 

90-2 

90-1 

90-25 

90-3 

90 

90-6 

90-5 

90-5 

90-9 

90-11 

90-8 

90-12 

90-24 

90-2 

90-9 

90 

90-12 

90-3 

90-25 

90-18 

90-12 

90-16 

90-45 

90-4 

90-4 

90-2 

90-2 

90-8 

90-27 

90-14 

90-14 

90-14 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

BUCKWHEAT CABBAGE CAMELINA CANOLA 

90-1 

01-1,02-1,03-1 

90-6 

90-5 

01-12,02-12,03-12 

90-1 

01-26,02-26,03-26 

90-8 

90-2 

01-23,02-23,03-23 

90-41 

01-18,02-18,03-18 

90-12 

90-3 

90-1 

90-2 

90-3 

90-1 

90-11 

(P)01PY,(P)02PY,(P)03PY 

01-10,02-10,03-10 

01-7,02-7,03-7 

90-1 

90-3 

90-1 

90-2 

01-13,02-13,03-13 

90-1 

CARAMBOLA 

TREES 

(P)40-1 

CHERRIES 

(P)47-9 

(P)47-5 

(P)47-2 

(P)47-1 

(P)47-7 

(P)47-1 

(P)47-10 

CHILE 

PEPPERS 

(P)51-1 

(P)51-2 

I-VIII 

50-29 

CITRUS 

CITRUS FRESH 

GRAPEFRUIT 

All Other 

Citrus Trees 

NECTARINES 

All Other 

Grapefruit 

Grapefruit 

Rio Red, Star Ruby 

& Ruby Red 

90-3 

90-8 

(P)90-8QE 

(P)40-28CV 

90-4 

90-5 

90-3 

90-3 

90-7 

Trees 

(P)40-28CV 

(P)40-3 

Trees 

(P)40-4 

LEMON 

Lemons 

90-3 

(P)90-12QE 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

LIME TREES MANDARINS MANGO TREES 

90-3 

(P)90-8QE 

(P)40-3 

(P)40-1 

Early, Midseason & Late 

90-3 

CITRUS (continued from previous page) 

ORANGES 

Navel 

Sweet & Valencia 

90-3 

90-3 

(P)47-4QE,(P)90-9QE 

(P)90-10QE 

Trees 

(P)40-28CV 

(P)40-3 

TANGELOS TANGERINE 

Minneola Orlando 

TREES 

90-3 

90-3 

(P)90-7QE 

(P)90-2QE 

40-3 

CLAMS 

(P)43-4 

(P)43-5 

(P)43-2 

(P)43-2 

COFFEE 

Coffee 

Tree 

(P)90 

(P)40CV 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

CORN COTTON 

CRANBERRIES FIGS FLAX 

FORAGE 

Corn 

01-64,02-64,03-64 

01-4,02-4,03-4 

01-46,02-46,03-46 

01-19,02-19,03-19 

01-26,02-26,03-26 

01,02,03 

01,02,03 

01-28,02-28,03-28 

01-140,02-140,03-140 

01-19,02-19,03-19 

01,02,03,04-95,05-95,06-95 

01,02,03,04-84,05-84,06-84 

01,02,03,04,05,06 

01,02,03 

01-104,02-104,03-104,04-34,05-34,06-34 

01-35,02-35,03-35 

01,02,03 

01-23,02-23,03-23 

01-12,02-12,03-12 

01-76,02-76,03-76,04-38,05-38,06-38 

01-86,02-86,03-86,04-60,05-60,06-60 

01-74,02-74,03-74 

01-102,02-102,03-102,04-62,05-62,06-62 

01-24,02-24,03-24 

01-91,02-91,03-91,04-41,05-41,06-41 

01,02,03 

01-16,02-16,03-16 

01-20,02-20,03-20 

01-52,02-52,03-52 

01,02,03 

(P)01PY,(P)02PY,(P)03PY 

01,02,03,04-65,05-65,06-65 

01-61,02-61,03-61 

01-18,02-18,03-18 

01-66,02-66,03-66 

01,02,03 

01,02,03 

01,02,03,04-27,05-27,06-27 

01-88,02-88,03-88,04-6,05-6,06-6 

01-141,02-141,03-141 

01-18,02-18,03-18 

01,02,03 

01-97,02-97,03-97 

01-27,02-27,03-27 

01,02,03 

01,02,03,04-58,05-58,06-58 

01-11,02-11,03-11 

Sweet 

90 

90-12 

90-10 

90-11 

90-5 

90-38 

90-11 

90-12 

90-12 

90-13 

90-40 

Cotton 

01-63,02-63,03-63 

01-9,02-9,03-9 

01-25,02-25,03-25,04-4,05-4,06-4 

01-12,02-12,03-12 

01-25,02-25,03-25 

01-100,02-100,03-100,-04-12,05-12,06-12 

01-27,02-27,03-27 

01-23,02-23,03-23,04-5,05-5,06-5 

01-62,02-62,03-62,04-4,05-4,06-4 

01-7,02-7,03-7,04-4,05-4,06-4 

01-11,02-11,03-11 

01-58,02-58,03-58,04-6,05-6,06-6 

01-38,02-38,03-38 

01-42,02-42,03-42 

01-24,02-24,03-24,04-5,05-5,06-5 

01-173,02-173,03-173,04-30,05-30,06-30 

01-15,02-15,03-15 

Extra Long Staple 

90-7 

90-5 

90-3 

90-16 

90-4 

90-3 

90-26 

90-4 

(P)90PY 

90 

Production 

90-5 

90-6 

90-25 

90-2 

04-2,90-2 

90-86 

90-2 

90-10 

90-22 

04-39,90-86 

90 

90-9 

90 

90-1 

90-16 

90-8 

90 

90-2 

04-28,90-66 

90 

90-17 

04-62,90 

90 

90-6 

90-2 

90-2 

90-3 

90-2 

90-15 

Fresh Market 

50-1 

50-4 

50 

50-11 

50-3 

50 

50-9 

50-11 

50 

50-16 

50-54 

50-66 

50 

50 

50-2 

Hybird Seed 

55-47 

55-39 

55-64 

55-8 

55-10 

55-5 

55-35 

55-6 

55-1 

55-4 

55-11 

Seeding 

50-9 

50-86 

50-2 

50-10 

50-8 

50-86 

50 

50-8 

50-4 

50-1 

50-16 

50-8 

50 

50-66 

50 

50-17 

50-1 

50 

50 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

GRAPES GRASS 

SEED 

CATTLE 

LIVESTOCK 

SWINE 

LAMB 

MACADAMIA 

NUTS/TREES 

MINT NURSERY 

MUSTARD 

MILLET OATS OLIVES ONIONS 

PAPAYA 

Grapes 

90-2 

90-31 

90-1 

90-6 

90-4 

90-2 

90-1 

90-12 

90-1 

90-3 

90-15 

90-1 

90-8 

90-18 

Table Grapes 

90-9 

Feeder 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81,82 

81,82 

81,82 

81,82 

81,82 

82 

82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

82 

82 

82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

81,82 

82 

82 

81,82 

82 

81,82 

81,82 

81,82 

81,82 

81,82 

82 

82 

81,82 

81,82 

81,82 

81,82 

81,82 

82 

81,82 

81,82 

81,82 

81,82 

81,82 

50-3,90-3 

90-15 

90-10 

90-13 

(P)90-2PY 

90-26 

90-2 

90-4 

90-5 

90-2 

90-10 

90-6 

90-4 

90-21 

90-1 

90-13 

90-19 

90-15 

90-11 

90-81 

90-41 

90-29 

90-4 

90 

90-92 

90-10 

90 

90-6 

90-66 

90-86 

90-1 

90-15 

90-52 

90-82 

90-2 

90-4 

90-46 

90-82 

(P)90PY 

90-37 

90-51 

90-25 

90-66 

90-37 

90 

90-1 

90-114 

90-14 

90-13 

90-24 

90-27 

90 

90-17 

90-12 90-2 

90-9 

90-14 

90-4 

90-2 

90-15 

90-3 

90-3 

(P)90-12NS 

90-6 

90-14 

90-3 

90-6 

Papaya 

(P)90 

Tree 

(P)40CV 

90-13 

90-6 

(P)90-18PY 

90-1 

90-7 

(P)50PO 

50-5 

50-7 

(P)50PO 

50-44 

50 

(P)50PO 

50 

(P)50PO 

(P)50PO 

50 

50 

50-45 

5016 

50 

50 

(P)50PO 

(P)50PO 

50 

(P)50PO 

(P)50PO 

50-31 

50 

(P)50PO 

50 

50 

50 

50-5 

50 

(P)50PO 

50 

(P)50PO 

(P)50PO 

50 

50-40 

50 

(P)50PO 

(P)50PO 

50 

(P)50PO 

50 

(P)50PO 

50 

50-10 

50 

(P)50-102PO 

(P)50PO 

50 

50 

50 

Cattle 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

Dairy 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

82 

(P)90-4 

(P)90-2 

Fed 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

PASTURE RANGELAND 

FORAGE 

PEACHES 

PEANUTS PEARS 

PEAS 

PECANS PEPPERS PISTACHIOS PLUMS POPCORN POTATOES 

(P)13 

(P)14 

(P)13 

(P)13 

(P)13-48,(P)14-15 

(P)13 

(P)13 

(P)14 

(P)13 

(P)13-23 

(P)13 

(P)13-114 

(P)13 

(P)14 

(P)14 

(P)14 

(P)13 

(P)13 

(P)13 

(P)13 

(P)14 

(P)13 

(P)13 

(P)14 

(P)13 

(P)14 

(P)13-98 

(P)13 

(P)14 

90-32 

90-2 

90-24 

90-77 

90-1 

90-18 

90-3 

90-28 

90-38 

90-27 

90-85 

90-10 

90-9 

90-7 

90-1 

90-12 

Dry 

90-18 

90-1 

90-27 

(P)90PY 

90-3 

90-27 

90-11 

Green 

90 

90-20 

90-8 

90-4 

90-1 

90-7 

90-1 

90-34 

90-17 

90-3 

90-10 

90-16 

90-42 

(P)90-2HF 

(P)90-21HF 

(P)90-1HF 

90-10 

90-4 

90-5 

90-4 

01-1,02-1,03-1 

01-5,02-5,03-5 

01-16,02-16,03-16 

01-46,02-46,03-46 

01-39,02-39,03-39 

01-4,02-4,03-4 

01-3,02-3,03-3 

01-2,02-2,03-2 

01-17,02-17,03-17 

01-61,02-61,03-61 

01-22,02-22,03-22 

01-5,02-5,03-5 

90-3 

90-3 

90-2 

90-5 

90-9 

90-1 

90-2 

90-11 

90-26 

90-1 

90-3 

90-4 

90-5 

90-3 

90-2 

90-33 

90-28 

90-2 

90-8 

90-12 

90-1 

90-6 

90-5 

90-15 

90-10 

90-25 

90-1 

90-3 

90-14 

90-13 

90-2 

90-5 

90-20 

90-2 

90-13 

90-17 

90-2 

41-24 

41-5 

41-1 

41-83 

41-2 

41-6 

41-6 

41-16 

50-13 

Peaches 

90-7 

90-15 

90-3 

90-2 

90-16 

90-4 

90-2 

90-5 

90-7 

90-4 

90-9 

90-12 

90-2 

90-1 

90-8 

90-6 

90-22 

90-4 

90-30 

90-1 

90-14 

90-10 

90-21 

90-1 

90-20 

90-6 

Fresh Freestone 

90-8 

90-4 

90-5 

90-1 

90-7 

Processing Cling 

90-10 

Processing 

Freestone 

90-8 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

PRUNES PUMPKINS RAISINS 

90-14 

50-7 

90-11 

Cultivated 

Wild Rice 

90-5 

90-6 

RICE 

Rice 

01-37,02-37,03-37 

01-13,02-13,03-13 

01-3,02-3,03-3 

01-2,02-2,03-2 

01-30,02-30,03-30 

01-17,02-17,03-17 

01-7,02-7,03-7 

01-1,02-1,03-1 

01-1,02-1,03-1 

01-23,02-23,03-23 

RYE SAFFLOWER SESAME 

90-14 

90-10 

90-3 

90-23 

(P)90-21PY 

(P)90-21PY 

90-6 

(P)90-11 

90-3 

90-13 

90-10 

90-2 

90-5 

(P)90-18 

SORGHUM 

Grain Sorghum 

01-37,02-37,03-37 

01-2,02-2,03-2 

01-37,02-37,03-37 

01-5,02-5,03-5 

01-18,02-18,03-18 

01-2,02-2,03-2 

01-5,02-5,03-5 

01-82,02-82,03-82 

01-46,02-46,03-46 

01-10,02-10,03-10 

01-21,02-21,03-21 

01,02,03,04-27,05-27,06-27 

01-16,02-16,03-16 

01-25,02-25,03-25 

01-13,02-13,03-13 

01-30,02-30,03-30 

01-92,02-92,03-92 

01-74,02-74,03-74 

01-2,02-2,03-2 

01-10,02-10,03-10 

01-17,02-17,03-17 

01-81,02-81,03-81 

(P)01-1PY,(P)02-1PY,(P)03-1PY 

01-1,02-1,03-1 

01-71,02-71,03-71 

01-57,02-57,03-57 

01-22,02-22,03-22 

01-59,02-59,03-59 

01-25,02-25,03-25 

01-202,02-202,03-202,04-18,05-18,06-18 

01-79,02-79,03-79 

01-1,02-1,03-1 

Hybrid 

Sorghum Seed 

55-2 

55-2 

55-19 

Silage 

(P)90-2 

(P)90-37 

SOYBEANS 

01-58,02-58,03-58 

01-47,02-47,03-47 

01-7,02-7,03-7 

01,02,03 

01-20,02-20,03-20 

01-124,02-124,03-124 

01,02,03,04-97,05-97,06-97 

01,02,03,04-85,05-85,06-85 

01,02,03,04,05,06 

01,02,03 

01-81,02-81,03-81,04-25,05-25,06-25 

01-46,02-46,03-46 

01-22,02-22,03-22 

01-58,02-58,03-58,04-36,05-36,06-36 

01-84,02-84,03-84,04-56,05-56,06-56 

01-74,02-74,03-74 

01-92,02-92,03-92,04-73,05-73,06-73 

01-79,02-79,03-79,04-41,05-41,06-41 

01-14,02-14,03-14 

01-38,02-38,03-38 

01-89,02-89,03-89,04-27,05-27,06-27 

(P)01-37PY,(P)02-37PY,(P)03-37PY 

01-85,02-85,03-85,04-57,05-57,06-57 

01-63,02-63,03-63 

01-1,02-1,03-1 

01-51,02-51,03-51 

01,02,03,04-10,05-10,06-10 

01-48,02-48,03-48,04-20,05-20,06-20 

01-76,02-76,03-76,04-13,05-13,06-13 

01-82,02-82,03-82 

01-3,02-3,03-3 

01-86,02-86,03-86 

01-1,02-1,03-1 

01-10,02-10,03-10 

01-63,02-63,03-63,04-45,05-45,06-45 


STATE 

Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Florida 

Georgia 

Hawaii 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

New Hampshire 

New Jersey 

New Mexico 

New York 


North Dakota 

Ohio 

Oklahoma 

Oregon 

Pennsylvania 

Rhode Island 


South Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

West Virginia 

Wisconsin 

Wyoming 

STRAW- 

BERRIES 

SUGAR 

BEETS 

SUGARCANE SUNFLOWERS 

SWEET 

POTATOES 

TOBACCO TOMATOES 

WALNUTS WHEAT 

(P)47-6 90-8 

(P)90-10NS 

(P)90-16NS 

(P)90-16NS 

(P)90-33NS 

(P)90-12NS 

(P)90-14NS 

(P)90-9NS 

(P)90-2NS 

(P)90-5NS 

(P)90-7NS 

Burley 

90-17 

90-108 

90-5 

90-25 

90-11 

90-57 

90-23 

90-7 

Cigar 

Binder 

90-2 

90-3 

90-11 

Cigar 

Filler 

90-3 

Cigar 

Wrapper 

90-2 

90-3 

Dark Air & 

Fire Cured 

90-22 

90-9 

90-19 

Flue 

Cured 

90-8 

90-37 

90-63 

90-13 

90-25 

Maryland 

90-5 

90-1 

Tomatoes 

90-17 

90-2 

90-11 

90-7 

90-2 

90-5 

90-6 

90-11 

90-16 

90-1 

90-26 

01-59,02-59,03-59 

01-2,02-2,03-2 

01-11,02-11,03-11 

01-45,02-45,03-45,04-18,05-18,06-18 

01-35,02-35,3-35 

01-40,02-40,03-40,04-13,05-13,06-13 

01,02,03 

01-20,02-20,03-20 

01-128,02-128,03-128 

01-42,02-42,03-42 

01,02,03,04-29,05-29,06-29 

01-91,02-91,03-91,04-5,05-5,06-5 

01-51,02-51,03-51 

01,02,03,04-88,05-88,06-88 

01-67,02-67,03-67,04-5,05-5,06-5 

01-36,02-36,03-36 

01,02,03 

01-23,02-23,03-23,04-4,05-4,06-4 

01-65,02-65,03-65,04-16,05-16,06-16 

01-83,02-83,03-83,04-20,05-20,06-20 

01-64,02-64,03-64,04-4,05-4,06-4 

01-96,02-96,03-96,04-35,05-35,06-35 

01-54,02-54,03-54,04-28,05-28,06-28 

01-83,02-83,03-83,04-29,05-29,06-29 

01-12,02-12,03-12 

01-10,02-10,03-10 

01-15,02-15,03-15 

01-27,02-27,03-27 

01-82,02-82,03-82,04-8,05-8,06-8 

(P)01PY,(P)02PY,(P)03PY,04-49,05-49,06-49 

01-76,02-76,03-76,04-28,05-28,06-28 

01,02,03,04-20,05-20,06-20 

01-30,02-30,03-30 

01-57,02-57,03-57 

01-45,02-45,03-45 

01,02,03,04-34,05-34,06-34 

01-65,02-65,03-65,04-4,05-4,06-4 

01-206,02-206,03-206,04-50,05-50,06-50 

01-23,02-23,03-23 

01-2,02-2,03-2 

01-78,02-78,03-78 

01-29,02-29,03-29 

01-21,02-21,03-21 

01-54,02-54,03-54 

01-16,02-16,03-16 

Fresh 

Market 

90-2 

90-5 

90-7 

50-16,90-4 

90-5 

90-4 

90-4 

90-3 

90-7 

90-2 

01-17,02-17,03-17 

01-70,02-70,03-70 

01-34,02-34,03-34 

01-13,02-13,03-13 

01-30,02-30,03-30 

(P)01PY,(P)02PY,(P)03PY 

01-2,02-2,03-2 

01-52,02-52,03-52 

01-29,02-29,03-29 

01-2,02-2,03-2 

90-4 

04-21,90-24 

90-3 

90-9 


Join the RCIS team today 

HAVING WHAT WE CONSIDER THE BEST TECHNOLOGY AND SERVICE IN THE 

CROP-INSURANCE BIZ DOESN’T MEAN MUCH UNLESS YOU HAVE THE BEST 

PEOPLE, TOO. COME SEE WHY RCIS IS A GREAT PLACE TO START AND 

BUILD A CAREER. VISIT WWW.RCIS.COM AND CLICK ON “CAREERS.” 

We grow stronger every day—together SM 

Visit “Careers” 

at RCIS.com 

© 2012 Rural Community Insurance Agency, Inc. All rights reserved. RCIS is an Affirmative Action and Equal Opportunity Employer M/F/D/V.

NATIONAL 

CROP INSURANCE 

SERVICES 

w w w . c r o p i n s u r a n c e i n a m e r i c a . c o m 


Other crop insurance companies 

can’t touch this. 

At Great American, we know it’s not enough to just 

access policy data from the field. We’re in touch 

with what agents really need: the ability to 

actually conduct business on-site, from start to 

finish. With our iPAD® app, our agents can write, 

sign and submit forms right where they’re 

standing — even if that’s in the middle of the 

soybeans. 

Touch-screen technology in the field. One more 

way Great American puts its strength and 

expertise right where it counts: 

in your hands and at your fingertips. 

Great American’s iPAD application 

draws data from our popular 

GreatAg policy administration system. 

Crop Insurance Division 

www.GreatAmericanCrop.com 

301 E. Fourth Street I Cincinnati, OH 45202. Great American Insurance Group is an equal opportunity provider. 

iPAD is a registered trademark of Apple, Inc. 

GreatAmericanInsuranceGroup.com

PRSRT. STD. 

U.S. POSTAGE 

PAID 

Permit No. 116 

LAWRENCE, KS 

8900 Indian Creek Parkway, Suite 600 

Overland Park, Kansas 66210

February 2012 - National Crop Insurance Services

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