Guidelines for `Added Land. Issued

July 10, 2000

Risk Management Agency Administrator Ken Ackerman says crop insurance yields applied to added land will be subject to new guidelines just issued by the agency. The new guidelines affect virtually all insurable 2001 annual crops. "The new guidelines will help ensure that insurance yield guarantees track with the productive capabilities of the added land," said Ackerman. "We set limits that will not affect most producers yet give us a reasonable amount of program oversight."

Added land procedures gradually have been relaxed to accommodate the growing size of farms and the need to insure such operations. Essentially, producers were allowed to use an existing insurance yield for a crop to establish the initial yield guarantee for the crop on the added land. Without additional safeguards, this practice could create the potential for program abuse because growing conditions can vary widely.

Under the new guidelines, approved yields for added land that were established for the 2000 crop year must be restructured for the 2001 crop year. By ensuring that accurate yield guarantees are established, producers will not have to pay for any potential rate hikes needed to offset potential excess losses.

Producers planning a major expansion of the acres they farm should contact their agent for more details. A listing of crop insurance agents is at the local office of the Farm Service Agency.