USDA Provides More Flexibility to Crop Insurance Policies for Coarse Grains

"In the past producers were required to lump NFAC and FAC into either an OU or an EU. This rule now allows soybean and sorghum producers more flexibility by giving producers the choice of insuring those practices separately." 

The USDA announced Wednesday, insurance changes for coarse grains will take effect in 2020. The Risk Management Agency (RMA) says the changes “allow producers more flexibility to choose enterprise unites (EU) or optional units (OU) by Following Another Crop (FAC) or Not Following Another Crop (NFAC) cropping practices in select grain sorghum and soybean counties.“ 

According to Martin Barbre with RMA, in the past producers were required to lump NFAC and FAC into either an OU or an EU. This rule now allows soybean and sorghum producers more flexibility by giving producers the choice of insuring those practices separately. 

Barbe says this change has been in the works for several years in an effort to simplify the process to make it more user-friendly. “We were finally able to gather the numbers and make everything work out and get the rule published.” 

According to the press release, the changes are important because: 

  • Allow producers to better manage the unique risks of each practice by having separate FAC and NFAC units.
  • Producers may now be indemnified independently by FAC and NFAC units. A gain on one of the cropping practices will not be offset by the loss on the other cropping practice.

Changes are further described in a final rule, now available on the Federal Register at regulations.gov. Interested parties are invited to comment on the rule for 60 days.