March 15, 2004, is the deadline for enrolling in crop insurance for spring-planted crops

For grain growers, nothing succeeds like a good crop sold at a decent price. But for producers in the western half of the mid-continent, insurance against less-than-ideal crops proved to be a smart buy in 2003.

"The drought from here west cut crop production significantly," said Dean Gibson, Gibson Insurance Group, Tipton, Mo. "We deal with more than 1,000 farmers in 36 counties and most of them submitted claims for crop loss of some size."

Nobody can forecast the 2004 growing season. But paying a crop insurance company to assume part of the production and price risk could be money well spent again this year.

Expect some changes in crop coverage this year. Since the 1980s, annual change in crop insurance details has been the rule, rather than the exception.

"Pilot programs and regional insurance coverage are underway in several states," said Gibson. "First, RMA needs to work the kinks out, then expand them to nationwide coverage."

This year, for example, a feeder cattle livestock risk policy is available to producers in Iowa and Kansas, but not in Missouri and Arkansas.

The two principal types of crop revenue coverage are revenue assurance (RA) and crop revenue coverage (CRC). Coverage with the two types of policies is similar, but premium costs can vary.

"RA traditionally costs less for higher levels of coverage," said Gibson. "However, this year, RA and CRC premium costs are moving closer together. Still, you want to check out what your premium is buying."

In addition to being a crop insurance agent for the past 22 years, Gibson also farms 1,250 acres in Cooper County, Mo., and manages a 200-cow beef operation. And, he has been his own steady customer.

"My variable cost to grow corn is $165 per acre; beans cost more than $100 per acre in out-of-pocket expenses," he said. "At the very least, I want to protect myself against the loss of those operating costs. I do that by purchasing revenue protection.

"I make an assignment of indemnity to my lender," Gibson added. "That means the lender has virtually no risk when he loans me operating money, which lets him charge a lower interest rate, and I don't have to collateralize land or equipment for an operating loan."

One big change in crop coverage for 2004 will be claims made for crops lost early in the season. Say you plant corn-fully insured-but the crop is wiped out by flood or an early hail storm. You still have time to plant another crop of soybeans or grain sorghum on those acres. What are your options for collecting on the lost corn crop and insuring the succeeding crop?

"You could collect 100 percent indemnity on the insured corn and decide not to insure the second crop at all," said Gibson. "Or, you could collect 30 percent of the indemnity on the corn crop, then insure the succeeding crop-assuming that it is planted on time. If you suffer a loss on this insured second crop, you'd be paid the full indemnity, minus the 30 percent collected earlier. It's a bit complicated and a farmer should sit down with his crop insurance agent to decide on the best option."

There's also a gray area where prevented plantings are concerned. As things stand now, prevented plantings are covered at some percentage of full indemnity. However, the yield for the year a crop could not be planted would be calculated at 60 percent of the transitional yield, which would reduce the actual production history.

USDA insists that crop insurance records and Farm Service Agency (FSA) figures agree in all instances.

"But it's a little like comparing apples and oranges in some cases," said Gibson. "For one thing, FSA identifies land in tracts. The insurance industry identifies land in units."

This year, Gibson will be able to reconcile most reporting differences with FSA offices. He has downloaded detailed GPS-satellite derived field maps for every farm in his trade territory. These are more accurate, more up-to-date than FSA maps drawn on aerial photos. More accurate maps can save farmers money on crop insurance premiums. If there are fewer acres in a field than the FSA map shows, the producer doesn't have to buy insurance for crops he doesn't grow. If the GPS-derived map shows more acres, the farmer knows his insurance policy covers all of his crop.

"We're doing a pilot program-the only one of its kind in Missouri-where farmers can report their revised acres to us here at the insurance agency, and we will transmit the update to the county FSA office," explained Gibson. "FSA will accept our field maps. We have every field in our computers and can adjust acreage in a short time. This should let both us and FSA streamline the way things are done."

March 15, 2004, is the deadline for enrolling in crop insurance for spring-planted crops. If you need to locate a crop insurance agent, go to http://www3.rma.usda.gov/tools/agents and click on your state.