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FCIC BOARD APPROVES SILAGE SORGHUM PILOT AND EXPANSION OF AGR-LITE

Contacts: John Shea (202) 690-0437

WASHINGTON, May 19, 2004 (revised May 21, 2004) - The Federal Crop Insurance Corporation (FCIC) Board of Directors (Board) recently voted to approve a pilot program of crop insurance for Silage Sorghum in two states and to make Adjusted Gross Revenue-Lite (AGR-Lite) available in five additional states, both effective for the 2005 crop year.

"These two actions are examples of USDA's Risk Management Agency (RMA) and others in the agriculture industry working together to best serve the needs of the producer," said Ross J. Davidson, RMA administrator. "This administration is committed to extending the benefits of risk management tools to agricultural producers in all parts of the country, and to bring helpful new products to the market whenever possible."

Silage Sorghum Pilot Program--Grain sorghum varieties grown for harvest as silage will be eligible for coverage under the new pilot program beginning in the 2005 crop year and continuing through the 2008 crop year for 2 counties in Colorado (Baca and Prowers) and 37 counties in Kansas (Barton, Decatur, Ellis, Finney, Ford, Gove, Graham, Grant, Gray, Greeley, Hamilton, Haskell, Hodgeman, Kearny, Lane, Logan, Meade, Morton, Ness, Norton, Osborne, Phillips, Rawlins, Rooks, Rush, Russell, Scott, Seward, Sheridan, Sherman, Smith, Stanton, Stevens, Thomas, Trego, Wallace, and Wichita). Non-silage varieties will not be covered under this pilot program. Under the current Coarse Grains Crop Provisions, grain sorghum grown for silage is not insurable, while corn grown for silage is. Kansas is one of the country's largest producers of this feed product.

Producers will be able to purchase coverage up to the 75 percent coverage level for this pilot program. The price election will be set at 80 percent of the corn silage price, which is obtained using RMA's newly revised corn silage pricing methodology. The National Grain Sorghum Producers Association was extensively involved with the project. RMA will finalize the policy terms and conditions and anticipates release of such with the 2005 crop year actuarial filing for grain sorghum in early October 2004. The sales closing date will be March 15, 2005, for the 2005 crop year.

AGR-Lite--In order to expand the AGR-Lite program into five new states, the Pennsylvania Department of Agriculture worked with the North Carolina Department of Agriculture and the Western Center for Risk Management Education at Washington State University to gather and present data to the Board. The Board approved the expansion of AGR-Lite in to North Carolina, Alaska, Idaho, Oregon, and Washington. AGR-Lite covers the adjusted gross revenue from the whole farm based on 5 years of tax forms and a farm plan. It was first available in Pennsylvania in 2003 and is now available in 12 states.

In other actions, the Board clarified the requirements for submissions of new products with respect to marketability and the reimbursement of research and development and maintenance costs for those products. For a statement of its requirements, please see http://www.rma.usda.gov/fcic/2004/506SenseoftheBoard_Final.pdf.

The changes for AGR-Lite and Silage Sorghum will be effective in the 2005 crop year. Interested producers should contact their crop insurance agents at that time regarding availability of these products in their States. A list of crop insurance agents is available at http://www3.rma.usda.gov/tools/agents/.