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RMA releases COMBO insurance policy to farmersKansas Wheat farmers have a new crop insurance product available this fall for the 2011 crop year. USDA's Common Crop Insurance Policy, known as the COMBO rule, revises Common Crop Insurance regulations to combine previous yield and revenue plans into one standardized insurance plan. "Rules of the new COMBO plan should be easier for wheat growers to understand and adhere to, yet keeps the features of the five plans that have been available to farmers for several years," says Dalton Henry, governmental affairs specialist for Kansas Wheat. The COMBO plan, which takes the place of the former Actual Production History, Crop Revenue Coverage, Revenue Assurance, Income Protection and Indexed Income Protection insurance programs, combines the principle features in the five plans that producers bought most often. The USDA's Risk Management Agency, which oversees the federal crop insurance programs, also developed a single rating and pricing component so all insurance coverage is consistent in insurance protection and cost to producers. William Murphy, administrator of the RMA, says the new program simplifies the insurance process for crop insurance agents and provides farmers a better understanding of the options available to them. "The COMBO rule will also reduce the amount of paper that the companies have to deal with since multiple, similar plans are rolled up into one insurance plan." Revenue protection will still be available for wheat, corn, grain sorghum, soybeans, sunflower, barley, canola, rapeseed and rice. Producers will now be able to choose revenue or yield protection for these crops using one plan. Basic provisions of each plan are: --Yield Protection: Production loss must occur due to naturally occurring events only. A producer's guarantee is determined by multiplying the production guarantee by the projected price. --Revenue Protection: Producers are protected against loss of revenue due to a production loss, price decline or a combination of both. The guarantee is determined by multiplying the production guarantee per acre by the "greater of" projected price or harvest price. --Revenue Protection with Harvest Price Exclusion: Producers are protected similar to the RP program, except the amount of insurance is based on the projected price only. The guarantee is measured by multiplying harvested production with harvest price, compared to the revenue guarantee. "Producers will find a lot of similarities between the COMBO plan and previous plans," Henry says. "Talk with your crop insurance provider to determine which of these new options provides the best coverage for your farm." If farmers do not change their coverage from previous CRC, RA, IP and APH plans before the Sept. 30 sales closing, their current coverage will roll into the equivalent CCIP coverage, he adds. RMA will now offer only one set of policy materials, Special Provisions, and actuarial documents; one rating and pricing methodology; and one premium calculation, unlike in the past where there were multiple, similar sets of documents. This combination has reduced the number of documents agents and producers must read and process; is easier to understand with fewer pricing methods to compare; and provides less chance of errors for producers, crop insurance companies, insurance agents, and the Risk Management Agency. The Federal Register published the Common Crop Insurance Regulations, Basic Provisions; and Various Crop Insurance Provisions final rule on March 30.
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