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RISK MANAGEMENT

RISK MANAGEMENT. Fruit Policy Provisions 2003. 2003 Price Elections. Insurability Requirements. Deadlines & Responsibilities. Sales Closing Date is November 20 th Production and Acreage Reporting Date is January 5 th Premium Due Date is September 15 th Production Report

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RISK MANAGEMENT

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  1. RISK MANAGEMENT Fruit Policy Provisions 2003

  2. 2003 Price Elections

  3. Insurability Requirements

  4. Deadlines & Responsibilities • Sales Closing Date is November 20th • Production and Acreage Reporting Date is January 5th • Premium Due Date is September 15th • Production Report • Update the Pre-Acceptance Worksheet

  5. Coverage Available • CAT – Minimum level available at 50% of Average Production and 55% of Price Election (Cost is $100/county/crop) • BuyUp – 50%, 55%, 60%, 65%, 70% & 75% of Average Production and 100% of Price Election

  6. Actual Production History (APH) • Basis from which coverage and premium is calculated • Uses up to 10 years of production history (depending upon crop) • Can be broken down by unit (section) for buyup policies (except blueberries)

  7. How Coverage is Calculated • Producer’s APH x Level of Coverage = Guaranteed Production • Example: 500 bu APH (Apples) x 65% level = 325 bu guarantee overall • Indemnity payment is bushels below guarantee x price election • Example: 275 bu overall harvested = 50 bu x $6.95 = $347.50 indemnity/acre

  8. Perils Insured Against • Adverse weather conditions • Fire, unless from uncontrolled weeds or debris • Insects, unless from insufficient pest control • Plant disease, unless from insufficient disease control • Wildlife, unless control measures were not taken • Failure of irrigation supply if caused by an above named peril

  9. Perils Excluded (All Fruits) • Inability to market the fruit for any reason other than actual physical damage from an insurable cause. Example: quarantine, boycott, or refusal of any person to accept production • Mechanical damage (including limb rub, scars, and puncture for apples)

  10. Uninsured Perils (By Crop) • Apples: Failure to size, color, or shape properly and russeting • Blueberries: Failure to install and maintain a proper draining system and failure to harvest timely • Grapes: Phylloxera, regardless of cause • Peaches: Split pits, regardless of cause

  11. What Is Counted as Production? • Appraised Production: Direct marketing acreage must be appraised prior to harvest to determine production to count • Marketable harvested and non-harvested production. • If all counted production is below the guarantee, an indemnity payment is made.

  12. Need More Information? Contact an Agent at Spartan Insurance 800 888-2767 OrYour Local GreenStone Farm Credit Services branch office

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