sealPurdue News

May 17, 2002

Time out of fields could be spent checking crop insurance

WEST LAFAYETTE, Ind. – As farmers continue waiting for the ground to absorb excess water from spring rainfall, they should take the time to review their crop insurance policies, said a Purdue University agricultural economist.

"Producers need to check the specifics of their own situation at this time," said George Patrick, Purdue Extension agricultural economist. "If inclement weather conditions force grain farmers to shift from corn to soybeans, they will still usually qualify for crop insurance on both crops. However, they do want to make sure there is nothing peculiar in their own situation they may need to take into account in decision making."

In Indiana, there are six types of multiple peril crop insurance covering corn and soybean acreage. However, the two most widely purchased are Actual Production History (APH), previously referred to as Multiple Peril Crop Insurance, and Crop Revenue Coverage (CRC). APH covers physical crop losses while CRC, the most popular form of crop insurance, insures against physical loss and price declines, Patrick said.

"These insurance policies provide plant, replant, late planting and prevented planting coverage to provide revenue for individual producers," Patrick said. "If producers instead choose to have group risk plan insurance, their indemnities are based on what happens in the county, not what happens on an individual producer's farm. There also is no replant, delayed or prevented planting coverage."

According to crop insurance policies, Hoosier producers have three options to choose from if they do not plant corn by June 5, which is considered the final planting date for that crop.

The first option producers have is to shift from corn to soybeans.

"A producer who has insured both crops for 2002 can shift corn acreage to soybeans with no problem," Patrick said. "This can be done before or after June 5, and the producer simply reports the larger number of soybean acres that actually were planted and will be billed for the corresponding acreage."

Another option producers have is to continue trying to plant their crops. The final planting date for corn is June 5 and June 20 for soybeans. For every day after the final planting date that planting is prevented, the yield guarantee decreases by 1 percent per day, Patrick said.

A producer's yield guarantee level is based on the average yield per acre they received over the past four years. For example, if a producer has an average corn yield of 120 bushels per acre and is insured at the 75 percent coverage level, there would be a yield guarantee level of 90 bushels an acre, Patrick said.

The final option would be for the farmer to try to qualify for the prevented planting payment, Patrick said. This option typically gives producers a payment of 60 percent of their insured yield. At that point, producers cannot harvest any other crop from that land and must use soil conservation practices, Patrick said.

"One of the reasons that the prevented planting payment is not 100 percent is that the farmers have a number of costs they will not be incurring," Patrick said. "They will not have the fuel and oil costs associated with planting, chemicals that would be applied after planting and the expenses at harvest. This payment tries to reflect more of the out-of-pocket costs that the farmer would have."

Patrick said about 6.9 million acres of Indiana cropland were covered by Federal Crop Insurance Corporation insurance policies In 2001. More than 96 percent of those insured acres were corn and soybeans. Slightly less than 60 percent of total corn and soybean acres planted in 2001 were insured. Patrick said it is anticipated that insurance levels for this year would be similar.

Writer: Jennifer Doup, (765) 494-6682,

Source: George Patrick, (765) 494-4241,

Related Web site:
Purdue Extension Delayed Planting Web site

Ag Communications: (765) 494-2722; Beth Forbes,;

Purdue News Service: (765) 494-2096;

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