March 16 is the deadline for signing up for 2009 crop insurance for Cornbelt row crops, and farmers not electing crop insurance this year will also be denying themselves access to the SURE program, the USDA’s permanent disaster aid program. SUpplemental REvenue assistance payments are contingent upon the operator carrying crop insurance or FSA’s Non-insurable Crop Disaster Assistance Program (NAP) coverage. That is a change in the 2008 Farm Bill which many farmers may be unaware.

The new federal policy was implemented when advocates called for permanent disaster assistance legislation, instead of annual appropriations, which were not always guaranteed. However, the writers of the legislation determined that farmers eligible for the SURE program must be required to carry crop insurance, and March 16 is the deadline for obtaining that coverage for row crops across the Cornbelt.

The SURE program is detailed in a factsheet from Ohio State University’s Ag Manager. It indicates eligibility is contingent upon a disaster declaration in your county or a contiguous county, crop production under 50% of normal, and coverage by crop insurance or the NAP program for non-covered crops. Additionally, average adjusted gross income cannot exceed $500,000 in non-farm income.

Through a complex set of calculations, the SURE program would determine a disaster payment for eligible farms. In general terms, the payment guarantee is 60% of the difference between total expected revenue and total farm revenue. However, there is a $100,000 upper limit on payments to producers from the SURE program. That will be a significant limiting factor in some cases, but not for some smaller farms.

For some farms, on issue will be how much is included in the “total farm revenue.” It includes more than just a grain settlement check from a droughty crop. Total farm revenue includes estimated crop value, any indemnity payments from crop insurance, and payments from the non-insurable crop disaster assistance coverage, marketing loan proceeds, direct payments, any counter-cyclical payments, and any ACRE payments if the farm is signed up for ACRE.

According to an FSA worksheet that is detailed on the Ag Manager website, total farm revenue is subtracted from the expected revenue that SURE guarantees. The difference is then multiplied by 60% to obtain the final calculation.

The requirement for crop insurance or NAP coverage is known as Risk Management Purchase Requirement, in case you contact an FSA office to ask detailed questions about eligibility. Important among various questions and answers you might have, is the requirement for all crops of economic significance in the counties farmed to be covered by crop insurance. In other words, your corn and soybeans in one or more counties have to be covered to be eligible for any future disaster payment. Additionally, any replanted or subsequent crops have to have crop insurance coverage. If an operator has crop insurance coverage, but not a land owner, the operator is eligible for SURE program disaster payments, but not the land owner.
CAT (catastrophic) coverage is not sufficient to meet the SURE requirements, nor will hail and wind insurance, provided by private insurance carriers. The requirements specify federal crop insurance. If you carry Adjust Gross Revenue insurance, that is an acceptable alternative.

Summary:
The SURE disaster aid program will provide financial assistance to producers beyond normal crop insurance coverage, but federally-subsidized crop insurance policies or NAP policies must be in place to qualify for the SURE program. That requires producers to have signed up for crop insurance by the March 16 deadline.