FSA programs explained: NAP coverage in 2012

James Neill
For the January 21, 2012 edition of Tri-State Livestock News.

The upcoming deadline to purchase Noninsured Crop Disaster Assistance Program (NAP) coverage is looming for spring-seeded and perennial crops. The upcoming deadline is March 15, 2012 in South Dakota.

I have always been amazed by the number of farmers and ranchers that choose to drop their coverage under NAP when the weather turns in their favor. I would caution anyone who chooses this option to rethink their decision. Failure to purchase at least a catastrophic level of crop protection, even on your pasture, can have a significant effect on your eligibility for certain disaster programs.

Certain disaster programs authorized in the 2008 farm bill required the purchase of at least catastrophic coverage on all crops in order to be eligible for assistance. This provision is called the Risk Management Purchase Requirement (RMPR). The RMPR is different for each program. Disaster programs that have this requirement are the Livestock Forage Disaster Assistance Program (LFP), the Emergency Assistance for Livestock, Honeybees and Farm-raised Fish Program (ELAP), and the Supplemental Revenue Assistance Payments Program (SURE).

These four disaster programs provided disaster assistance for just about any weather-related loss from the death of livestock to grazing losses to purchased feed losses. The 2008 farm bill only authorized these programs until October 2011. This means that these four disaster programs are currently not available for 2012.

If these programs are not available in 2012, why should I worry about crop insurance coverage and RMPR? I stress the importance of purchasing crop insurance on all crops to include NAP coverage for non-insurable crops and crops without a catastrophic coverage because of history. Looking back at previous farm bills, you may have noticed Congress’ tendency to develop Ad Hoc programs. These programs are usually developed out of necessity given the agricultural disaster conditions of the country. In 2007, Congress authorized a Crop Disaster Program and a Livestock Disaster Program in response to crop and livestock losses of 2005, 2006 and 2007. These programs required crop insurance as a prerequisite for eligibility.

Currently, talks are underway for the 2012 farm bill. This bill may include provisions for providing assistance for losses in 2011. This cannot be certain since the bill has not yet been written nor approved. However, following the RMPR requirements in 2012 could help to ensure eligibility for these programs if such a situation was to develop.

The bottom line here is that we don’t know what will happen in the future on disaster programs. I firmly believe that the RMPR requirement will not disappear. Therefore, review your crop insurance coverage and purchase NAP coverage for your crops that are uninsurable or eligible for NAP coverage when no catastrophic coverage exists. This is the best way to ensure your eligibility for future disaster assistance.

Paying the $250 per crop service fee for non-insurable crops is a small price to pay for eligibility in future programs. The deadline in South Dakota to purchase NAP on your perennial grass and spring-seeded crops in March 15. Please check with your local Farm Service Agency Service Center for deadlines in other states. However, it is never a bad idea to contact your local Farm Service Agency and ensure that you are covered for the 2011 crop year.

James Neill is the County Executive Director for the Farm Service Agency in Meade County (SD) and can be contacted at Questions about the Risk Management Purchase Requirement or any other Farm Service Agency program should be directed to your local Farm Service Agency Service Center.