Contact:
Shirley Pugh, 202-690-0437

2009 SPECIAL PROVISIONS OF INSURANCE RELEASED

WASHINGTON, May 29, 2008 - Risk Management Agency (RMA) today released the 2009 fall crop year actuarial documents containing new Special Provisions of Insurance (SPOI) quality adjustment statements for barley, oats, rye, canola, safflower, and wheat. Corn, soybeans, grain sorghum, flax, and sunflowers special provisions for 2009 will also contain these new statements.

Quality adjustment is a process that reduces the quantity of mature production when it meets certain requirements provided in the crop provisions. This adjusted production to count is used for indemnity and actual production history purposes. Discount factors and additional procedures for quality adjustment are listed in the specific special provisions statements for each county/crop.

RMA redesigned the quality adjustment procedures to be more responsive to producer's needs, improve the efficiency of loss adjustment on poorer quality grain, and to treat all producers more equitably.

The primary focus of the revisions in the special provisions quality adjustment statements, beginning with the 2009 crop year, are graduated mycotoxin discount charts based on severity, in an attempt to more closely reflect actual market price discounts that occur based on the severity of mycotoxin damage.

RMA solicited input on the 2009 changes to the quality adjustment procedures from insurance industry groups, grower associations, concerned parties from various states, and RMA personnel. The agency is optimistic that the new procedures will continue strengthening the economic stability of agricultural producers, better allow market conditions to dictate use of poor quality grain, and maintain a sound risk management program.

For more information, see the actuarial documents containing the new special provision statements.

Presentation: Production to Count, Quality Adjustment, Sampling, and Grading Overview (PDF)