With planting season well underway throughout most of the United States, several concerns have been raised in relation to area weather conditions and prevented planting (PP). Below are a few important points to remember when producers are considering prevented planting.
What is an insured PP peril and when must it occur?
The peril that prevents a producer from planting must occur during the Prevented Planting Insurance Period.
The peril must also be an insurable cause of loss. The Common Crop Insurance Policy, Section 12, defines insurable causes of loss as “unavoidable, naturally occurring events.” Occurrences such as crop or management practices, lack of inputs, inadequate equipment, lack of labor, or other uninsurable causes are not considered prevented planting.
What is the prevented planting insurance period?
This is the time period within which the insurable peril which prevented a producer from getting their crop planted must occur.
For a carryover insured, the insurance period for PP begins on the previous crop year’s sales closing date (SCD) for the insured crop in the county, as long as nothing changed with the entity (no new partners, no change in tax ID numbers, etc. For these entities, the 2023 prevented planting insurance period began on the 2022 SCD for the state/county/crop that was prevented from being planted.
For new policyholders, the insurance period for PP begins on the SCD for the insured crop in the county for the crop year the producer’s application is accepted; in other words, the prevented planting insurance period starts with the current year’s SCD.
If there is a new entity in 2023, or a change was made to an existing entity (a new partner was added to an existing LLC and the new partner did not have an MPCI policy the previous crop year, for example), the prevented planting insurance period will start with the 2023 SCD for the state/county/crop that has been prevented from planting.
What does “General to the area” mean?
“General to the area” refers to other producers that have similar geographic, topographic, and soil characteristics when compared to the policyholder. These producers were also prevented from planting by the same peril during the same prevented planting insurance period.
When does a prevented planting indemnity get reduced?
Any time a crop that meets the definition of a second crop is planted after a crop that has been prevented from being planted, the indemnity will be reduced by 65%. Cover crops can be planted and then hayed, grazed, or cut for silage, baleage, or haylage and the prevented planting indemnity will not be reduced. If the cover crop is harvested for grain or seed by the policyholder or any other person, the prevented planting indemnity will be reduced by 65%.
Lastly, if a second crop is planted before or during the Late Planting Period of the first crop that was prevented from being planted, the prevented planting indemnity will be reduced to zero. A statement was added to several Special Provisions stating that corn planted on acreage following a crop that has been prevented from being planted will not be considered a cover crop.
Does the insured have to insure a second crop?
If a crop meeting the definition of a second crop is planted after the Late Planting Period (or Final Plant Date if there is no Late Planting Period) of the prevented crop and there is an active policy for the crop, the second crop will be insured at 100% of its MPCI guarantee and the prevented planting indemnity will be reduced. If the second crop is planted after the Late Planting Period (LPP) of the second crop and there is an insurable peril that prevented the second crop from being planted during the LPP, then the producer will have the option to insure the second crop at its prevented planting guarantee or not insure the second crop. Regardless of the decision made, the prevented planting indemnity of the first crop will be reduced to 35%.
When can we use an Intended Acreage Report? APH history?
An Intended Acreage Report can be used when the producer has not planted any crop in the county for which prevented planting insurance was available or has not received a PP insurance guarantee in all of the 4 most recent crop years. A producer will be considered to have planted if their APH database contains actual planted acres.
In the 2021 crop year, RMA allowed an Intended Acreage Report to be used for the first 2 years an entity farms in a new county. An Intended Acreage Report must be submitted by the SCD for the state/county/crop on the MPCI application. For the second year, if the Intended Acreage Report has any acres listed, including a zero, the Intended Acreage Report will be used to determine eligible acres for a prevented planting indemnity regardless of the acres listed in the APH database. If the intended acreage report is blank for the second year, the acres in the APH database will used.
Can a producer claim prevented planting due to drought?
As with other PP claims, the acreage must be located in an area where other producers farming acreage with similar characteristics were also prevented from planting the crops, and this can be verified by us.
However, in the case of drought, other growers may anticipate a return of average precipitation and still plant while other growers may not. When both cases are considered to be good farming practices, the RMA recognizes both planted and PP acreage may exist in the same area.
For non-irrigated acreage to qualify for PP due to drought:
For non-irrigated acreage to qualify for PP due to drought, the insured must prove, and we must be able to verify, that there is insufficient soil moisture for germination or progress to maturity as of the Final Plant Date (FPD) or within the Late Planting Period. The insured must provide verifiable, acceptable documentation proving that the acreage prevented from being planted has insufficient soil moisture for germination of seed or progress toward crop maturity due to a prolonged period of dry weather. The amount of rainfall needed to permit sufficient soil moisture to allow germination and crop production is determined by experts based on the crop, area in which it is grown, and other relevant factors. Some examples of sources that can be used include any university that records and studies the weather and local weather forecasters’ reports.
To eliminate any questions about the soil moisture content of the acreage in question, the insured may submit a written soil moisture profile/report of the acreages from a disinterested third party that is knowledgeable in determining soil moisture.
Policyholders may also use documentation (i.e. published material or written opinions) from agricultural experts for the insured PP crop stating that the amount of soil moisture needed to germinate seed or for progress toward maturity is not available. Agricultural experts must be disinterested third parties. This written opinion must be based on the crop, area in which the crop is grown, soil type in which the crop is grown, and other relevant factors.
Prevented planting payments may be made on irrigated acreage when, on the FPD (or within the LPP, if the producer chooses to plant during this period), there is no reasonable expectation of having adequate water available to carry out an irrigated practice due to an insured cause of loss that occurred during the prevented planting insurance period.
If there are specific prevented planting scenarios you would like to discuss, please contact your Area Claim Supervisor (ACS) or your Regional Claim Manager (RCM).