Corn Producers in Illinois, Indiana, Iowa and Minnesota will have the opportunity this year to participate in a pilot program from USDA's Risk Management Agency (RMA) aimed at lowering their crop insurance premiums.
Under the program, producers who plant at least 75% of their corn acres with hybrids that feature YieldGard Plus with Roundup Ready Corn 2 or YieldGard VT Triple technology can receive a premium rate discount on nonirrigated corn.
The Biotech Yield Endorsement, or BYE, is a new crop insurance feature that lowers premiums for producers of nonirrigated corn. The average cost of a total policy premium will be reduced by approximately 14% on revenue assurance policies. On average, this discount will amount to more than $2.00/acre on the grower-paid portion of the premium.
Monsanto co-submitted the BYE with Western Agricultural Insurance Company under section 523(D) of the Agricultural Risk Protection Act of 2000. This section allows any company, state or agricultural consulting company to submit to the Federal Crop Insurance Corporation (FCIC) Board of Directors an actuarially sound insurance program that helps manage or reduce risk to the producers. (USDA's RMA operates and manages the FCIC.)
Tim Hennessy, new business development manager with Monsanto, says the company submitted thousands of data points and more than three years of side-by-side plot data. “It took us about two years to build a submission package that demonstrated to the FCIC that our triple-stack technologies deliver more consistent yields, effectively reducing risk,” he says.
“We are anxious for anyone who thinks they can help the farmer reduce risk to submit proposals,” says Shirley Pugh, director of public affairs for the RMA. “This is an innovative program that helps to manage risk and lower premiums, which reduces costs to producers and to taxpayers.”
More to come
Expect other companies with competing technologies to follow suit. Todd Frazier, marketing director for Pioneer, says the company is working to submit data on hybrids with Herculex insect protection traits. “We are interested in working with the RMA to look at Herculex participating in the BYE program as we move into 2009,” Frazier says. “As a company, we have chosen Herculex because it offers a broader spectrum control and better efficacy than other traits. That also reduces risk for the producer.”
Ben Kaehler, traits licensing leader for Dow AgroSciences, adds, “We believe that Herculex provides at least the same level of yield protection and stability as YieldGard traits, and because of that Dow AgroSciences and Pioneer are working closely to combine our information that the RMA and FCIC needs so that we can participate in a BYE-type program for 2009.”
Syngenta is holding conversations with the crop insurance industry about addressing the needs of growers. “Syngenta applauds RMA's acknowledgement that new yield-boosting technologies can reduce production risk,” says Tom Gahm, head of business communications with Syngenta. “For this concept to really benefit growers, we believe it needs to include a broad cross section of technologies and best management practices that increase yields.”
Final program details will be available through crop insurance agencies. The latest program information will be posted at www.rma.usda.gov.
Although this is a pilot program, the four BYE pilot states represent more than half of the corn acres harvested for grain in the United States.
Pugh says that the pilot program is designed to ensure that the program will work as intended. “We're fielding a lot of calls from agencies, and they want to know when they can start selling the program,” she says.