Monday, August 29, 2016

Crop Insurance Update: Noninsured Crop Assistance Program

Written by M. Sean High—Staff Attorney

Reauthorized under the 2014 Farm Bill, and administered by the United States Department of Agriculture (USDA) Farm Service Agency (FSA), the Noninsured Crop Disaster Assistance Program (NAP) offers eligible producers of eligible non-insurable crops the possibility of receiving financial assistance in the event a natural disaster causes crop loss, reduced yields, or prevents crop planting. 

Available through county FSA offices, NAP provides coverage similar to crop insurance and may provide producers with up to 65% of yield history when a crop insurance policy is not available.  According to FSA, “NAP provides basic coverage equivalent to the catastrophic level risk protection plan of insurance coverage, which is based on the amount of loss that exceeds 50 percent of expected production at 55 percent of the average market price for the crop.” FSA further stated that producers my elect additional NAP coverage, but if elected, those producers “must pay a premium in addition to the service fee.”

To be considered an eligible producer for NAP, a producer must be “a landowner, tenant or sharecropper who shares in the risk of producing an eligible crop and is entitled to an ownership share of that crop.” Furthermore, FSA stated, “an individual’s or entity’s average adjusted gross income (AGI) cannot exceed $900,000 to be eligible for NAP payments…[and that] NAP payments received, directly or indirectly, will be attributed to the applicable individual or entity and limited to $125,000 per crop year, per individual or entity.”

Eligible crops under NAP must be crops which are “commercially produced agricultural commodities for which crop insurance is not available and be any of the following: 
  •       Crops grown for food;
  •       Crops planted and grown for livestock consumption, such as grain and forage crops, including native forage;
  •       Crops grown for fiber, such as cotton and flax (except trees);
  •       Crops grown in a controlled environment, such as mushrooms and floriculture;
  •       Specialty crops, such as honey and maple sap;
  •        Sea oats and sea grass;
  •        Sweet sorghum and biomass sorghum;
  •         Industrial crops, including crops used in manufacturing or grown as a feedstock for renewable biofuel, renewable electricity or biobased products;
  •        Value loss crops, such as aquaculture, Christmas trees, ginseng, ornamental nursery and turf-grass sod; and
  •         Seed crops where the propagation stock is produced for sale as seed stock for other eligible NAP crop production.”

For eligible Pennsylvania producers, upcoming 2016 application deadlines for coverage for NAP final dates are as follows: 
  •          September 1, 2016—Value Loss Crops for the following year (flowers for fresh cut, onion sets, turfgrass sod, Christmas trees, aquaculture, ginseng, mushrooms, etc.) 
  •          September 30, 2016—Grazing/forage crops, Garlic, Wheat, Barley, Rye, and Mint for the following year’s crop
  •          November 20, 2016—Apples, Apricots, Aronia (Chokeberry), Asparagus, Blueberries, Caneberries, Cherries, Grapes, Hops, Nectarines, Peaches, Pears, Plums, Strawberries 
  •          December 1, 2016—Honey for the following year

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