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John Shea, 202-690-0437


WASHINGTON, Nov 4, 2008 - RMA, in consultation with the Federal Crop Insurance Corporation Board of Directors, has released a Whole-Farm and Enterprise-Unit pilot program authorized by the 2008 Farm Bill.

The program is designed to give farmers who insure their crops using whole-farm and enterprise-unit structures the same subsidy payments as farmers who insure their crops under basic and optional unit structures.

Until now, growers who chose to insure their crops under basic and options units received a higher dollar amount of subsidy from the Federal Government, though both forms of insurance coverage offered the same subsidy percentage. The pilot will calculate whole-farm and enterprise-unit subsidies so that they are approximately equal to the subsidy amount the Federal Government would have paid were the crop insured under basic or optional units.

To determine the revised subsidy percentages for enterprise-units, RMA used 2008 crop insurance data to calculate the enterprise unit discount across a selection of policies that would be eligible for the additional subsidy and found an overall weighted average discount for enterprise units. This weighted average discount was then used to calculate revised enterprise unit subsidy percentages such that the dollar amounts of subsidy are approximately equal whether the insured producer chooses an enterprise unit structure, or a basic/optional unit structure. A similar process was used to calculate the revised whole-farm unit subsidies.

The Whole-Farm and Enterprise-Unit Pilot Program will be available for barley, canola, corn, cotton, rice, soybeans, sunflowers, and wheat. Only the new Enterprise-Unit subsidy structure will be available for sorghum.

This program will be available for spring 2009 crops wherever whole-farm and enterprise-unit structures are already available. The actuarial documents on the RMA Web site will provide additional information regarding program availability and subsidy percentages.

For more information, please contact your crop insurance agent.