Lancaster farming. (Lancaster, Pa., etc.) 1955-current, December 30, 2000, Image 24

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    A24-Lancaster Farming, Saturday, December 30, 2000
Revenue Crop Protection A
In Six Pa. Counties
Co.) Diversified farmers in
six Pennsylvania counties are
now eligible for an innovative
whole farm insurance revenue
insurance pilot program called
the Adjusted Gross Revenue
Crop Insurance Program.
This new crop insurance is
available in Berks, Carbon,
Lackawanna, Lehigh, Monroe,
and Northampton counties for
the 2001 insurance year, accord
ing to John Berry, agricultural
marketing agent.
“The whole farm insurance
should work well for Pennsylva
nia’s family farms that grow
multiple crops. Many of these
diversified producers have few
options under traditional crop
insurance programs,”
said Berry. ■
The adjusted gross
revenue insurance
plan provides insur
ance based on the
lesser of the individual
producer’s previous
five-year average
Schedule F tax infor
mation or the expected
revenue for the insur
ance year. This single
insurance product
covers all agricultural
commodities produced
bv the policyholder.
Expanding the whole
farm pilot program
will provide more ex
perience in insuring
whole farm income
throughout the U.S.
A listing of crop in
surance agents is
available at local Farm
Service Agency offices
and USD A Service
Centers. Sales closing
date for AGR is Jan.
The Adjusted Gross
Revenue (AGR) insur
ance plan is a non
traditional whole farm
risk management tool.
The AGR concept uses
a producer’s historic
Schedule F tax form
information as a base
to provide a level of
guaranteed revenue.
• Provides an insur
ance safety net for
multiple agricultural
commodities in one in
surance product.
• Establishes a
common denominator
for commodity pro
duction cash receipts.
• Makes simple and
straightforward use of
income tax forms.
• Reinforces pro
gram creditability by
using Internal Reve
nue Service tax forms
and regulations.
The AGR product
provides the producer
protection against low
farm revenue due to
unavoidable causes.
Covered farm revenue
is income from agri
cultural commodities
reported on the Sched
ule F tax form, includ
ing incidental
amounts of income
from animals and
animal products and aquacul
ture reared in a controlled envi
ronment. Incidental livestock
income represents the crop pro
duction value fed to livestock.
AGR protection is calculated
by multiplying the approved
gross revenue times the percent
coverage level and payment rate
selected by the producer. The
approved gross revenue is the
smaller of the average of the
producer’s prior five years of
Schedule F tax information. The
average gross revenue can be ad
justed for expanded operations
or expected revenue for the in
surance year.
For example, a producer with
a $lOO,OOO approved gross reve-
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nue who chose 80/75 coverage
would have $60,000 protection
($lOO,OOO x 80 percent coverage
x 75 percent payment).
Loss payments are triggered
when the adjusted gross income
for the insured year is less than
the loss inception point. The loss
inception point is calculated by
multiplying the approved gross
revenue by the chosen percent
coverage (65, 75, or 80). Once a
loss is triggered, the payment
rate is 75 percent of the revenue
shortfall. Loss payment for this
example would trigger when the
income for the insurance year is
below $BO,OOO ($lOO,OOO x 80
percent coverage).
Producer eligibility require-
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ments include:
• Filed five consecutive years allowable income is from ani
of Schedule F tax forms. For mals and animal products.
2000, the 1994-1998 tax years. • Must have Multi Peril Crop
• Produces eligible commodi- Insurance (MPCI) when more
than 50 percent of allowable
• U.S. citizen or resident.
• Files calendar year farm tax
•No more than 50 percent of a private insurance agent to
allowable income is earned from learn more details about AGR
purchase and resale of agricul- and other crop insurance prod
tural commodities. nets.
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• No more than 35 percent of
income is from insurance crops.
This summary is for general
illustration only. Please contact