Key Take-Aways:

  • Insurance premiums are reduced by $5/acre for planted cover crops in 2021
  • Grower must certify with FSA office by June 15th
  • Reduction automatically applied to the August billing statement

Producers who planted cover crops this year can reduce their crop insurance premium by $5 per acre under a new U.S Department of Agriculture program. Producers have until June 15, 2021, to prove and certify they planted these cover crops.

The USDA’s Pandemic Cover Crop Program is designed to maintain conservation efforts while offsetting the financial impacts of COVID-19 on growers.

To qualify for the premium reduction, a producer needs to file a Report of Acreage form called an FSA-578. It needs to show the cover crops and be certified by the local FSA office by June 15th, 2021. The cover crops must have been planted by July 1st, 2020 to qualify.

Producers will automatically receive the reduction on their August 2021 billing statement. No other action is needed by the grower if they meet the certification deadline. The $5 premium reduction is per acre, lowering costs the more acres put into cover crops. For example, if a grower puts in 10 acres, there will be a $50/acre premium reduction. It will top out if the overall premium reaches $0.

According to the USDA, there is enough funding to cover all producers who want to participate in the new program. Currently, this program is only provided for the 2021 crop year.

All cover crops reportable to FSA are eligible and include cereals and other grasses, legumes, brassicas and other non-legume broadleaves, and mixtures of two or more cover crop species planted at the same time. 

Iowa, Illinois, and Indiana already have programs to receive a premium reduction for planting cover crops. Any producer participating in this new program will receive additional benefits on top of what they already receive.

The new program does not change any other crop insurance policy standards such as acreage reporting dates or reporting requirements.

To read more on the USDA program you can click here. You can also reach out to a PRM Risk Management Advisor about how this can affect your premium and operation.

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