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30
Sep
2019
Prevented Planting Disaster Payments Q&A
Author: Scott Stiles, Extension Economist

Earlier this year Congress passed a $19.1 billion disaster aid bill that included more than $3 billion in funding for disasters that impacted farmers and ranchers. One component of the disaster assistance is the enhancement to prevented planting coverage under crop insurance. Producers who suffered delays in plantings during 2019 will be eligible for a prevented planting supplemental disaster payment.

Under the new disaster assistance package, farmers with a prevented planting insurance claim will be eligible for a supplemental payment of up to 15% of their prevented planting indemnity. The bonus prevented planting payment is 10% for growers who did not purchase the harvest price option (HPO), and 15% for growers who purchased the harvest price option.

The prevented planting bonus payment is based on the indemnity and not an addition to the initial prevented planting payment factor.

For example, corn has a prevented planting payment factor of 55% of the original revenue guarantee (60% for soybeans). Assume a corn grower has an average production history (APH) of 200 bushels per acre and selects an 80% coverage level. The grower would have a prevented planting payment of $352 per acre in 2019 ($352 = $4/bu. proj. price × 200 bu./ac APH × 80% coverage level × 55% PP factor).

In this scenario, the farmer with the HPO would receive a supplemental disaster payment of $52.80 per acre (15% × $352).

USDA’s Risk Management Agency has a “Frequently Asked Questions” website devoted to the Prevented Planting Disaster Payments program. It can be found at this link:

https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Prevented-Planting-Disaster-Payments


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