The snowpack and unusually long winter have farmers itching to take machinery out and get spring’s work moving. We’ll have a later start this year, but today’s farmer can accomplish a lot in little time.
When the conditions are too wet and time has run out, Prevented Planting (PP) is an option in your multi-peril crop insurance policy. This option kicks in when you fail to plant a crop by the Final Plant Date or by the end of the Late Planting Period, which is 25 days after the Final Planting Date for most crops. To qualify for PP, the inability to plant must be due to an insured cause of loss that is common in the surrounding area. Failure to plant when other area farmers did seed could result in a denial of your claim. Communicating PP to your crop insurance agent is vital. A timely claim must be filed.
All PP acres need to be listed on your acreage report and cannot be added after your acreage report has been filed. These acres must be insurable for the indemnity to be paid. Acreage that is considered insurable is land that has been planted, insured, and harvested in one of the last four years, commonly referred to as “the one in four rule.” If land has not been planted, insured, and harvested in the last four years, you must plant, insure, and harvest a crop on that land to be eligible for PP benefits in the future.
Your PP coverage depends on your personal Approved Production History, the spring crop insurance price, and a predetermined percentage of your crop insurance guarantee. A 60% PP coverage level is in place for most crops, but there are exceptions including corn, which has 55% PP guarantee. You can also buy up to add 5% on your PP coverage that costs extra in your premium. However, the PP buy-up option had to be chosen by the sales closing deadline of March 15th, 2023. Eligibility for PP acres work off the 20/20 rule. This means you need 20 acres of PP by crop to make it payable or 20% of the unit. If you have Optional Units, those 20 acres will need to be on the same unit. If you have Enterprise Units the 20 acres can be spread across your farm and all those small potholes can be counted and paid if the acres total at least 20 acres or more.
In most PP claims the payment is made based on the crop that is planted in the field. However, last year the Risk Management Agency (RMA) did make a change to that rule saying that you can claim a crop for PP that’s different from the one planted. For example, if your intention was to plant corn, but it was too wet and you planted soybeans later in the season, you can claim corn PP in your soybean field. Insurance companies may ask for proof to back up the information that you intended to plant another crop. One other change from a few years ago helps livestock producers. RMA allows you to hay the land claimed as PP anytime you want and still receive a full PP indemnity. Before, you would have to wait until November 1st to touch that land.
Eligibility for PP is also based on how much of one crop you have planted in one of the last four years. Crop insurance companies can’t pay you 500 acres of PP corn if you’ve never proven you’ve raised 500 acres of corn. Once you hit your limit on a crop, PP acres will roll to the next closest paying crop. There are more complicated scenarios that can be done if you decide to claim PP on one crop, but then plant a second after the Late Planting Period. This is called first crop/second crop.
Your AgCountry crop insurance specialist can go over the PP rules and how they will work best for your operation. My hope is that with warmer weather and sunshine, we won’t have to talk about PP, but the option is there in case the climate doesn’t cooperate with spring’s work.
