During the growing season, there are times when an insured will decide to put their crop to an alternate use. The most common occurrence is probably when corn insured for grain will be cut for silage.
It is important to remember that the Common Crop Insurance Policy (23-br) states in section 14(d)(1)(i-ii) that an insured must receive consent from their AIP prior to putting a crop to an alternate use.
- Duties in the Event of Damage, Loss, Abandonment, Destruction, or Alternative Use of Crop or Acreage
Your Duties –
(1) You must obtain consent from us before, and notify us after you:
(i) Destroy any of the insured crop that is not harvested
(ii) Put the insured crop to an alternative use
(iii) Put the acreage to another use
(iv) Abandon any portion of the insured crop
Within each crop provision, there is the insurable intended use for the crop. This is commonly found under the section entitled “Insured Crop.” This section will explain how the crop will be insured. As an example, wheat, under the small grains crop provision (23-0011), states the insured crop will be wheat that is “planted and harvested for grain”. If an insured decides to put their wheat acres to an alternate use (e.g., hay), they would have to submit a MPCI Notice of Loss. This notifies the AIP that an appraisal must be completed for all acres being put to an alternate use.
Corn will quite often will be put to an alternate use. The Special Provisions for each state and county determine whether corn can be insured as either grain, silage, or both. The insured determines how the corn will be insured. In grain only or silage only counties, there is only one choice. In Dual Counties (both grain and silage types are available in the Special Provisions), the insured must decide which acres will be insured as grain, and which will be insured as silage. Once this is established by a signed MPCI acreage report, the insurance will attach accordingly.
For corn insured as grain:
- If the insured decides to chop any acres for silage, they must submit a MPCI Notice of Loss prior to any acres being chopped so the AIP can make an appraisal for their production. Corn for grain must be submitted in bushels, and the same rules apply for corn insured as silage.
- If the insured decides to take silage corn to harvest as grain, the insured must submit a MPCI Notice of Loss prior to any acres being shelled for grain so the AIP can make an appraisal. Production for corn insured as silage must be submitted in tons.
What happens if the insured does not submit a MPCI Notice of Loss prior to chopping corn (insured for grain) as silage?
If a unit’s chopped silage acreage (alternate use) is less than 50% of the unit’s total acreage and the remaining acreage harvested for grain (intended use) does not suffer a production or revenue loss, the AIP may apply that per acre yield to the alternate use acreage and roll it to the unit’s APH.
If either of these two conditions are not met, a yield not less than the MPCI guarantee will be applied to all acres that were put to alternate use.
In conclusion, it is vitally important that the insured submit a MPCI Notice of Loss prior to putting any insured acreage to an alternate use.
If any questions arise regarding what is considered an accepted harvest method, the MPCI Crop Provisions should be reviewed. The definition of “Harvest” can be found in Section 1, Definitions.
Please know that AgriSompo Underwriters and Area Claims Supervisors are always available to assist with questions about putting acreage to alternate use.