What is Prevented Planting?

By Paul Weltz, Insurance Sales Manager, Farm Credit Services of North Dakota

What is prevented planting? This article is intended as a brief guide to some common questions and answers in regards to prevented planting, and how it can impact a crop insurance policyholder. Always refer to your crop insurance policy provisions for details about the program .As defined by the Crop Insurance Handbook, preventive planting is the failure to plant the insured crop with proper equipment by the final planting date designated in the Special Provisions for the insured crop in the county. You may also be eligible for a prevented planting payment if you failed to plant the crop with the proper equipment within the late planting period. You must have been prevented from planting the crop due to an insured cause of loss that is general in the surrounding area and that prevents other producers from planting acreage with similar characteristics.

Prevented planting (Acronym PP used herein) coverage is included in APH, CRC, and RA plan coverage for most major crops in the Upper Midwest including barley, canola/rapeseed, corn, dry beans, dry peas, flax, grain sorghum, green peas, hybrid seed corn, millet, mustard, oats, potatoes, rye, safflowers, soybeans, sugarbeets, sunflower seed, and wheat.

When collecting prevented planting payments, the standard policy allows for 60% of the guarantee as an indemnity for the above crops, except sugar beets is 45% and potatoes are 25%. For example: You have a 40 bushel APH, and choose the 75% level for an RA policy with a price election of $7.00 (example only - 2009 RA spring prices not released yet). PP indemnity would equal (40bu * 75% level) * 7.00 * 60% PP coverage. Thus would equal (30bu guarantee * $7.00 price * .60 PP coverage), or $126 per acre.

Where PP is available, most crops and counties allow for an increase in PP coverage. A 5 % increase (PF) or 10% increase (PT) can be added to your policy when the insured peril does not already exist prior to the sales closing date.

There are some requirements when it comes to field size. A unit must have 20 acres of PP to qualify or 20 % of the unit must be PP, whichever number is less (20/20 rule). The maximum amount of acres available, by crop, is determined by a formula using the last four years of planting within your Actual Production History.

 In 2008, many Northern Plains farmers were unable to harvest their fall crops due to excess moisture, or if the crops were harvested, the ground may not be prepared for spring planting. This ground may be eligible for prevented planting in the spring of 2009. If the crop was insured in 2008 and insurance coverage remains continuous, you may be eligible for a 2009 PP payment provided other producers with acreage having similar characteristics in the surrounding area were also prevented from harvesting a mature spring-planted crop due to insurable causes of loss. The key phrase is “provided other producers” so please remember that if you are the only one in your neighborhood who submits for a prevented planting claim, it will raise a red flag, and your claim may be denied.

There are many provisions within prevented planting so it is important to work with your crop insurance agent to find a solution that is best for your farm. A wet spring will bring enough headaches and heartaches, so work with your agent ahead of time to make sure your crop insurance policy is not one of the headaches.