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  • Q What is a beginning farmer or rancher?

    A
    A beginning farmer or rancher is an individual who has not actively operated and managed a farm or ranch with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 5 years. This includes an insurable interest as an individual or as a substantial beneficial interest holder (10 percent or more) in another person who has an insurable interest in any crop or livestock. Crop years when the beginning farmer/rancher was under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years) or on active duty in the U.S. military may be excluded from consideration of the 5 crop years.
  • Q What are the benefits of being a beginning farmer or rancher?

    A
    • Exemption from paying the administrative fee for catastrophic (CAT) and additional coverage (buy up) level policies;
    • Additional 10 percentage points of premium subsidy for additional coverage policies (buy-up) that have premium subsidy;
    • Use of the production history of farming operations where beginning farmers and ranchers were previously involved in the decision making or physical activities; and
    • An increase in the substituted yield for yield adjustment, which allows a replacement of a low yield due to an insured cause of loss, from 60 to 80 percent of the applicable transitional yield (T-Yield) for the crop in the county.
  • Q When will the benefits for beginning farmers and ranchers be available?

    A
    Beginning farmer and rancher provisions are available for all insurance plans for 2015, except insurance policies with contract change dates before June 30, 2014. These policies are Nursery; Rainfall Index for Annual Forage; Livestock Gross Margin; Livestock Risk Protection; peppers; and strawberries. The incentives will not apply to these polices in 2015 because the interim rule was published after the contract change date for these policies, which is the date RMA must make all changes to a policy for the upcoming crop year. For these insurance plans, beginning farmer and rancher benefits will be available starting with the 2016 crop year.
  • Q What are the qualifications to be a beginning farmer or rancher?

    A

    Business entities may receive beginning farmers and ranchers benefits only if all of the substantial beneficial interest holders of the business entity qualify as a beginning farmer or rancher. For example, a son moves home to take over the family farm and incorporates with his spouse and neither have previous farming experience. Their corporation would qualify for beginning farmer and rancher benefits. However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive beginning farmer and rancher benefits. Although the son qualifies as a beginning farmer or rancher, the father does not, so the corporation cannot receive beginning farmer and rancher benefits.

  • Q What if I had beef cow-calf pairs as my 4-H project while in high school, is that considered an insurable interest in livestock and would it count towards the 5 crop years of insurable interest as a beginning farmer or rancher?

    A

    Owning cow-calf pairs would be considered an insurable interest in a crop or livestock. However, you may exclude any crop years of insurable interest in a crop or livestock from consideration for beginning farmer and rancher eligibility purposes if the insurable interest was while you were under the age of 18 (including the crop year you turn 18).

  • Q Why is the definition of beginning farmer and rancher for crop insurance different from other USDA agencies?

    A

    Section 11016 of the 2014 Farm Bill provided a definition, along with specific benefits, for beginning farmers and ranchers unique to the Federal crop insurance program. Therefore, other USDA agencies may have different qualifying criteria and benefits for their beginning farmer and rancher programs

  • Q How do I apply for beginning farmer and rancher benefits?

    A

    Contact your crop insurance agent. You will need to complete a Beginning Farmer and Rancher Application and provide acceptable documentation for any crop years you wish to exclude from consideration of beginning farmer and rancher status for when you were under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years), or on active duty in the U.S. military. You will be notified if you qualify.

  • Q How long can I be a beginning farmer or rancher and have beginning farmer and rancher benefits?

    A

    Once you have 5 crop years of insurable interest in a crop or livestock, including having a substantial beneficial interest in another person who has an insurable interest in a crop or livestock, you are no longer entitled to beginning farmer and rancher status. Once you elect and qualify for beginning farmer and rancher status, it is continuous until the earlier of:

    • You have had an insurable interest in a crop or livestock for more than 5 crop years;
    • 5 crop years of beginning farmer and rancher benefits are exhausted; or
    • You cancel the Beginning Farmer and Rancher Application.
  • Q If I change my crop insurance agent or Approved Insurance Provider can I keep my beginning farmer and rancher benefits? Do I have to complete a new Beginning Farmer and Rancher Application?

    A

    Yes, you can keep your beginning farmer and rancher benefits as long as you remain eligible. Changing an insurance agent or Approved Insurance Provider does not impact your beginning farmer and rancher eligibility. When you change insurance agents or Approved Insurance Providers you do not need to complete a new Beginning Farmer and Rancher Application but you must provide your new insurance agent or insurance provider a copy of your previously completed Beginning Farmer and Rancher Application and notice of approval.

  • Q What if I change my farming operation? For example, if I form a corporation or other business entity, can I retain my beginning farmer or rancher status?

    A

    A business entity may receive beginning farmer and rancher benefits if all of the substantial beneficial interest holders of the business entity qualify as a beginning farmer or rancher. If you qualify as a beginning farmer or rancher and you form a corporation in which you are the sole member, your corporation would be eligible for beginning farmer and rancher benefits. For example, a husband and wife form a corporation and neither spouse had previous farming experience or an insurable interest in a crop or livestock. The corporation would be eligible for beginning farmer and rancher benefits. However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive beginning farmer and rancher benefits. Although the son may qualify as a beginning farmer or rancher, the father does not and as such the corporation cannot receive beginning farmer and rancher benefits.

  • Q I am in night college classes yet want beginning farmer and rancher premium subsidies now, do I have to wait until I complete my degree to deduct those years from experience?

    A

    No, you can receive beginning farmer and rancher benefits while attending college or university. However, these years will count towards the maximum 5 years that a producer can qualify for beginning farmer and rancher benefits.

  • Q Why did my yield substitution go to 60 percent of the transitional yield (T-Yield) when it was 80 percent of the T-Yield before?

    A

    When you no longer qualify for beginning farmer and rancher benefits, you will receive the same yield substitution as all other policyholders who are not beginning farmer or ranchers. You will also no longer be exempted from paying the administrative fees for your policies and you will no longer receive an additional 10 percentage points of premium subsidy.

  • Q Is an interest in Conservation Reserve Program acreage considered an insurable interest in a crop or livestock for determining eligibility for beginning farmer and rancher benefits?

    A

    No, an interest in Conservation Reserve Program acreage is not considered an insurable interest in a crop or livestock because there is no crop or livestock for the acreage.

  • Q If a person has actively operated or managed the planting and harvesting of an uninsurable crop or owned and raised uninsurable livestock in a county, is that considered an insurable interest in a crop or livestock? For example, a person has 100 percent share in the planting and harvesting of carrots in Iowa where carrots are not insurable and owned and raised uninsurable chickens.

    A

    In determining beginning farmer and rancher status, an insurable interest does not mean that the crop or livestock has to be insurable, just that the person must have an interest that is at financial risk in the crop or livestock. In the example provided, the person has a financial risk that is considered an insurable interest for the purpose of determining beginning farmer and rancher benefits.

  • Q For perennials, what constitutes a crop year - when it is planted, when any of the crop is produced, or when the crop reaches production minimums or insurable age?

    A

    A crop year, for beginning farmer and rancher benefits purposes, for perennials is when the tree, vine, or bush produces a crop that is of such a value to be commonly harvested and marketed for the area. For insurable crops, it is when the crop has reached production minimums or insurable age and for uninsurable crops, as determined by local agricultural experts.

    Determining crop years that can be excluded due to the beginning farmer or rancher being under the age of 18, in post-secondary studies, or on active military duty.

    To determine whether an individual has an insurable interest in crop or livestock in a crop year and whether the crop year can be excluded:

    1. The crop year is when the person had a financial interest in a crop or livestock and is based on the actual crop or livestock produced, for:
      1. For insurable crops and livestock, the crop year is from the sales closing date to the end of insurance date;
      2. For uninsurable crops the crop year is from the planting date to the harvest date; and
      3. For uninsurable livestock the crop year is from July 1 to June 30.
    2. Any exclusion must meet procedural criteria, such as military, education, and 18 years old or younger exclusions.
    3. If the exclusion meets the criteria in number 2 above and the exclusionary time overlaps the crop year in number 1 above, the crop year may be excluded.
  • Q When does the crop year start for exclusion purposes? A person attended college January through May 2014 and planted soybeans in June 2014. If the sales closing date for the policy is March 15, would just 2 months of college (April and May) be considered when determining whether the crop year can be excluded? If the sales closing date is considered the beginning of the crop year, then the person was only in college for 2 months of that crop year and the requirement is one semester (or 4 months).

    A

    The crop year begins with the sales closing date and ends with the end of insurance date. The student attended a semester for 4 months, which overlapped the crop year, meeting the procedural criteria for exclusion. Since the individual met one of the exclusion criteria during the crop year, the crop year may be excluded.

  • Q A person was enrolled in college from September 2009 to June 2010 and produced corn in crop years 2009 and 2010. Is this considered 1 or 2 years of college for exclusions of a crop year?

    A

    In this example, the corn crop year begins on March 15 (the sales closing date) and ends December 15 (the end of insurance). The person met the 4-month college exemption and the college time overlapped both the 2009 and 2010 crop years for corn. Therefore, both crop years may be excluded.

  • Q If a person was in college from September 2010 through June 2011 and during that time had a herd of beef cattle, would this be considered 2 crop years for a crop like corn but 1 crop year for livestock?

    A

    Yes. The person met the 4-month college exclusion and the crop years are excluded. See the table below.

    Commodity/Crop Year Crop Year College Exclusion Overlap
    Corn CY 2010 March 2010 to December 2010 September 2010 to June 2011 Yes
    Corn CY 2011 March 2011 to December 2011 September 2010 to June 2011 Yes
    Livestock CY 2011 June 2010 to June 2011 September 2010 to June 2011 Yes

  • Q Are there a minimum number of months in a calendar year in which interest in a crop or livestock must have been in place to consider it a year of having interest?

    A

    No, a crop or livestock crop year is counted if the person had a financial risk during the crop year.

  • Q Does there need to be a relationship between being in college and when the interest in the crop or livestock took place, does it need to occur in the same months?

    A

    Yes. Any allowable exclusions must overlap the crop year when the individual had an insurable interest in a crop or livestock.

  • Q If an individual had an interest in livestock from December 2011 through January 2012, is this considered 1 or 2 crop years? What if the insurable interest was March 2012 through August 2012?

    A

    The livestock crop year is July 1, 2011 to June 30, 2012, and July 1, 2012 to June 30, 2013. An interest between December 2011 and January 2012 is 1 crop year. An interest between March 2012 and August 2012 is 2 crop years.

  • Q If the beginning farmer and rancher applicant does not certify whether he or she will use someone else’s production history on the application, are they still allowed to request the use of another person’s history under Beginning Farmer and Rancher provisions at the production reporting date?

    A

    Yes, the beginning farmer or rancher can notify the Approved Insurance Provider (crop insurance company) as late as the production reporting date when a production report is provided consistent with other production reporting requirements.

  • Q Is a beginning farmer or rancher required to have a signed statement from the other person granting permission for the beginning farmer or rancher to use their production history when using another person’s history?

    A

    Consent from the other person whose production history is being used is required. The procedures will be clarified in a later issuance. The beginning farmer or rancher is also required to have supporting records, upon request.

  • Q Are the years of production history transferred from another person to a beginning farmer or rancher considered when determining the number of years of an insurable interest in a crop or livestock for beginning farmer and rancher eligibility purposes?

    A

    The years of history transferred do not count as crop years of insurable interest unless the beginning farmer or rancher had an insurable interest in the crop, such as a substantial business interest, but if that was the case, it would likely fall under Crop Insurance Handbook, Paragraph 1208 or 1209, and the beginning farmer or rancher would not transfer another person’s history, as provided in Paragraph 7 of the Beginning Farmer and Rancher Procedures.

  • Q Are the number of years of production history transferred from another person to a beginning farmer or rancher limited to the number of years that the beginning farmer or rancher was previously involved in the farming or ranching operation?

    A

    Unlike the Transfer of actual production history data in the Crop Insurance Handbook, Paragraph 1207, the number of years of production history that may be transferred is not limited by the number of years the beginning farmer or rancher was previously involved in the other person’s farming or ranching operation. However, a beginning farmer or rancher can only use another person’s production history for a crop that the beginning farmer or rancher was previously involved in. If the beginning farmer or rancher was involved with the livestock, they can use the other person’s livestock records. If the beginning farmer or rancher was involved with a crop, they can use the other person’s crop production records, provided all of the requirements in Paragraph 7 of the Beginning Farmer and Rancher Procedure are met. Only the production history of the specific acreage being transferred may be transferred to the beginning farmer or rancher.