LIVESTOCK INSURANCE, GROUP RISK PROTECTION EXPANDED AND MODIFIED FOR 2004 CROP YEAR

James Callan (202) 720-6200
Shirley Pugh (202) 690-0437

WASHINGTON, Nov 17, 2003 - The U.S. Department of Agriculture's Federal Crop Insurance Corporation Board of Directors (FCIC Board) voted during its recent meeting to expand and modify several of its programs to better serve producers.

"This administration is committed to serving the interests of America's agricultural producers in a responsive and responsible manner," said Risk Management Agency (RMA) Administrator Ross J. Davidson, Jr. "Moving quickly to modify or expand programs to work better for producers is a common-sense way to be responsive to their needs, which is a primary goal for RMA."

Below is brief information about expansions and modifications to these programs for the 2004 crop year.

LRP-Feeder Cattle: This product is designed to insure against declining market prices. The FCIC Board approved changes to LRP-Feeder Cattle effective, to the maximum extent practicable, starting in 2004. The program will now expand to allow insurance of heifer, Brahman, and dairy feeder cattle as well as feeder cattle at all weights. The weight eligibility criteria were changed to allow the insurance of feeder cattle at additional weight ranges with an applicable price factor based on type of feeder cattle. The board also approved a pilot program to allow 13- and 17-week contracts for feeder cattle. LRP-Feeder Cattle is available to cattle producers located in any county of the following States: Colorado, Iowa, Kansas, Nebraska, Nevada, Oklahoma, South Dakota, Texas, Utah, and Wyoming.

Puerto Rico Coffee: Coffee insurance has been available in Puerto Rico since 1948 and covers both the fruit and trees from losses due to hurricanes only. Puerto Rico, through its commonwealth-owned insurer, proposed to change the policy to add an 85 percent coverage level, increase premium rates, and increase the coffee price elections. The FCIC Board approved the changes. During the review process, the FCIC Board also determined that additional changes to the policy needed to be made to protect the interests of producers and maintain the integrity of the program.

GRIP: The Group Risk Income Protection (GRIP) plan is similar to the standard Group Risk Plan (GRP); however, GRIP adds a revenue component. GRP provides coverage for widespread loss of yield in a county, while GRIP provides coverage for widespread loss of revenue in a county. The FCIC Board authorized expanding GRIP, beginning with the 2004 crop year, into all counties that are currently approved for GRP corn in the states of Texas and Wisconsin, and for GRP soybeans in the state of Wisconsin, giving producers more risk protection options.

GRIP-HRO: The FCIC Board approved the Group Risk Income Protection-Harvest Revenue Option (GRIP-HRO), which is an optional endorsement to the Group Risk Income Protection (GRIP) plan of insurance for corn and soybeans. GRIP-HRO offers "upside" price protection by valuing lost bushels at the harvest price in addition to the coverage offered under the GRIP plan of insurance. GRIP-HRO will be available in the states and counties where the GRIP plan of insurance is available for corn and soybeans.

Sweetpotatoes: The FCIC Board expressed its concerns with the high loss ratios and loss frequencies experienced by the sweetpotato pilot program but voted to continue the pilot program through the 2004 crop year with significant changes. Approved changes include continuation of the program revisions made for the 2003 crop year, including the requirement that the producer must have grown sweetpotatoes for commercial sale 3 of the 5 previous years and that acreage increase may not exceed 110 percent of the greatest number grown in the past 3 years. The FCIC Board also voted to make appropriate rate changes in each county based on prior loss experience, and to limit coverage levels to no more than 60 percent versus the current 75 percent coverage level. Additionally, the modified policy will cover basic units only. The FCIC Board directed the implementation of a comprehensive field-monitoring program to focus on program delivery and implementation, including agent and loss adjuster performance in order to enforce compliance with the program's rules and procedures.

CRC Grain Sorghum: A new method for determining the Crop Revenue Coverage (CRC) Grain Sorghum Base and Harvest prices was approved by the FCIC Board. Currently, the CRC price is established as 95 percent of the applicable Chicago Board of Trade price for corn. Beginning in the 2004 crop year, the CRC grain sorghum price will be based on the price percentage relationship between grain sorghum and corn, as determined by RMA based on the January USDA World Agricultural Outlook Board forecasts of corn and grain sorghum prices in lieu of the existing methodology. Multiplying this ratio by the Chicago Board of Trade corn futures price will determine the CRC price for grain sorghum instead of the flat rate of 95 percent of corn price currently used

Interested producers should contact their crop insurance agent regarding specific changes to these policies and eligibility requirements. Additional information is also available at http://www.rma.usda.gov/. A list of crop insurance agents is available at local Farm Service Agency Offices or by using RMA's Agent Locator at: http://www3.rma.usda.gov/tools/agents.