Q: What should the insured do if there are unharvested acres of corn at the calendar date for the end of insurance period (EOIP), which is September 30th for silage and December 10th for grain?
A: File a timely notice of loss with their crop insurance agent for any damage due to an insurable cause of loss on or before the calendar date for the EOIP for all unharvested corn, which may result in the following determination(s) by Approved Insurance Providers (AIP) in accordance with the Risk Management Agency’s (RMA) procedures:
- AIPs may authorize policyholders, on a case-by-case basis, more time to attempt to harvest the crop so claims can be settled based on harvested production in accordance with subparagraph 702B of the Loss Adjustment Manual Standards Handbook (LAM). An AIP may allow additional time to harvest when the following conditions are met:
- The insured provides a timely notice of loss to their crop insurance agent;
- The AIP determines and documents that the delay in harvest was due to an insured cause of loss;
- The insured demonstrates that harvest was not possible due to insured causes; and
- The delay in harvest was not because the insured did not have sufficient equipment or manpower to harvest the crop by the EOIP.
- AIPs may make final inspections in accordance with paragraph 702 of the AIPs will account for all insured acres of the crop that were harvested or unharvested and appraised. This will include applying quality adjustment as outlined in the Coarse Grains Crop Provisions (CP), applicable State/County Special Provisions, and the Corn Loss Adjustment Standards Handbook.
- AIPs may require the insured to leave representative sample areas in accordance with paragraph 924 of the Representative sample areas are used when deferred appraisals (subparagraph 921B of the LAM) are required and the insured requests immediate release of the acreage.
- AIPs may settle claims based on the appraisal from the remaining unharvested acres. Follow LAM procedure regarding final disposition of a crop.
Q: Can an insured harvest past the calendar date for the EOIP?
A: Yes. The AIP may authorize additional time to complete loss adjustment due to an insured peril preventing harvest by the calendar date for the EOIP, including additional time to harvest the crop on a case-by-case basis, as explained above.
Q: Is the insured required to harvest all corn acreage in order for the AIP to complete the claim?
A: No, AIPs may complete a claim based on an appraisal of unharvested acreage in accordance with subparagraph 921A of the LAM.
Q: What if an insured cannot mechanically harvest the crop acreage due to an insurable cause of loss?
A: Subparagraph 921D of the LAM includes procedure for determining unable to mechanically harvest. No production will be counted for acreage that is determined unable to mechanically harvest. If mechanical harvest is feasible with normal harvest methods/equipment on any portion of the unharvested acreage, the AIP can appraise and count only the production that could have been mechanically harvested. Wet field conditions, snow covered fields, or inaccessible roads/bridges that prevent harvest of the crop by the calendar date for the EOIP does not mean the acreage can never be mechanically harvested with normal harvest methods/equipment. This may only be a temporary condition. Likewise, the fact that it would cost more to harvest the crop than the crop is worth does not constitute that the insured is unable to mechanically harvest the crop.
Q: Can AIPs use harvested production from representative sample areas for appraised production and to obtain samples for quality adjustment determinations?
A: Yes, subparagraph 921C of the LAM allows for harvested representative sample appraisals.
Q: If the acreage is appraised (vs. harvested) and put to another use, what effect is there on the Actual Production History (APH) database?
A: Refer to subparagraph 1304E of the Crop Insurance Handbook FCIC-18010. For any unharvested acreage, appraised potential production is included on the production report and used in the APH database. If acreage of the crop was destroyed/put to another use and an appraisal of the potential production was not made (not requested for APH database purposes or no claim), the production report will indicate the planted acres and a “zero” yield.
Q: Does quality adjustment include discounts for the moisture content of corn grain?
A: There are no quality discounts for moisture content. If moisture adjustment is applicable, it will be made prior to any adjustment for quality in accordance with section 11(d) of the Coarse Grains CP. Section 11(d) of the Coarse Grains CP specifies that corn production to count will be reduced by 0.12 percent for each 0.1 percentage point of moisture in excess of fifteen percent (15%), and if moisture exceeds thirty percent (30%), production will be reduced by 0.2 percent for each 0.1 percentage point of moisture in excess of thirty percent (30%).
Q: If corn grain has a test weight of 44.00 to 48.99 (on the discount factor chart in Section A of the Special Provisions) with no other eligible quality discounts, can the quality discount be determined by a reduction in value (RIV) if the corn grain is sold?
A: In accordance with the Special Provisions, the quality discount is determined by the discount factor chart in Section A of the Special Provisions for the applicable county and a RIV discount is not an option. See the following example test weight discount factor chart for reference:
Q: An insured’s corn grain production is damaged due to an insurable cause of loss and the production is rejected by the elevator/buyer due to low test weight. Is the damaged corn grain production eligible for an indemnity when there is no buyer for the production?
A: Every reasonable effort should be made by the insured and the AIP to find a market for the damaged corn grain production including:
- A determination if there are buyers outside of the local marketing area;
- Determination if livestock feeding operations or other types of salvage buyers are willing to buy the damaged production; and
- Fair consideration to deliver production to a market outside the insureds local marketing area (distant market) is equal to or greater than the production’s value at the distant market.
If a market still cannot be found for the damaged production, the AIP can make zero market value determinations in accordance with subparagraph 1102H of the LAM. A zero market value determination by the AIP will result in zero production to count for claims purposes, if the production is destroyed in an acceptable manner.
Q: Does zero market value procedure in the Special Provisions apply if the corn grain test weight is on the discount factor chart in Section A (44.00 through 48.99) and no viable salvage market can be found?
A: Zero market value procedure applies if the AIP determines there are insured quality deficiencies and there is no salvage market. However, if the corn grain test weight is 49.00 and above (having no insured quality deficiencies), then zero market value procedure would not be applicable.
Q: If the AIP determines there is zero market value production due to insured quality deficiencies, does the production have to be destroyed?
A: Production must be destroyed in an acceptable manner in order to receive the discount factor of 1.000 (zero production to count for claim purposes). If production is not destroyed, discount factors will be determined in accordance with Section D of the Special Provisions.
Q: Are there specific quality adjustment procedures when the edible portion of a crop is exposed to flood waters?
A: In accordance with Section C of the Special Provisions, if the edible portion of a crop is exposed to flood waters it is considered adulterated and should not be used for feed and food:
“The Food and Drug Administration guidelines state when an edible portion of a crop is exposed to flood waters, it is considered adulterated and can be injurious to human or animal health and should not be used for feed or food. For acreage of an insured crop in which the edible portion of the crop has been exposed to flood waters, such production is considered to contain substances or conditions qualifying under Section C3 with a level exceeding the maximum amount allowed. Such production is not required to be sampled and tested by an approved laboratory. Whether you intend to harvest or not harvest such acreage, you must give us notice to inspect the crop. Such production will be considered to have zero market value if destroyed in an acceptable manner. Refer to Section D. If you harvest production from such flood-damaged acreage and commingle with production from acreage not damaged by flood, such commingled production will not be adjusted for any quality deficiencies listed in Section C.”