FAQ - Glossary Terms and Definitions

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ACT--The Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.)
AGR-- Adjusted Gross Revenue
APH--Actual Production History
CAT--Catastrophic Risk Protection
CCC--Commodity Credit Corporation
CIH--Crop Insurance Handbook
CSREES--Cooperative State Research, Education, and Extension Service

FSA--Farm Service Agency
FCIC--Federal Crop Insurance Corporation
IRS--Internal Revenue Service

LAM--Loss Adjustment Manual
MPCI--Multiple Peril Crop Insurance
PHTS--Policyholder Tracking System
RMA--Risk Management Agency
USA--United States of America
USDA--United States Department of Agriculture

Additional Coverage--A plan of insurance established by FCIC that provides the Coverage comparable to a level for a single crop that is equal to at least 65 percent (65%) of the approved yield indemnified at 100 percent of the expected market price.

Agricultural Commodity--Grain and non-grain crops, vegetables, fruits, nuts, nursery plants, floriculture, Christmas trees, Maple tree sap, animals, products from animals such as milk, eggs, etc., and any other agricultural production, excluding timber, forest, and forest products.

Catastrophic Coverage (CAT)--A plan of insurance established by FCIC that provides coverage comparable to a level for a single crop that is equal to 50 percent (50%) of the approved yield indemnified at 55 percent (55%) of the expected market price. This is the minimum level of coverage required for a person to qualify for certain other USDA program benefits unless the producer executes a waiver of any eligibility for emergency crop loss assistance. CAT coverage equivalent is not available under AGR for the 1999 insurance year.

Changes--Changes in ownership, business structure, size of operation, share, management practices, type of farming activity, accounting methods or any other practices that may alter average farm income.

Continuous AGR Reports--AGR reports submitted by a producer for each consecutive tax year within the base period. Continuity is interrupted if a producer is NOT entitled to income from a share in ANY agricultural commodity's production during a tax year.

Contract--The contractual agreement between the insured and the insurance provider consisting of the accepted application, the AGR Provisions, the AGR Special Provisions, the AGR software, and the applicable regulations published in 7 CFR Chapter IV.

County--Any county, parish, or other political subdivision of a state. For the purposes of the AGR policy, any county that is contiguous with a pilot county will be considered to be a part of the pilot county. Counties that are contiguous to counties that are contiguous to pilot counties are NOT considered to be a part of the pilot county.

Coverage--The insurance provided by the AGR policy against loss of covered revenue.

Crop Revenue Coverage (CRC)--An insurance program that guarantees a stated amount of revenue. CRC covers revenue losses due to a low price, low yield, or any combination of the two.

Database--The data used to calculate the average/approved AGR and record the AGR history. Five continuous tax years of data are used.

FCIC--The Federal Crop Insurance Corporation, a wholly owned Government Corporation administered by the Risk Management Agency within USDA.

Fiscal Year--Twelve consecutive months ending on the last day of any month except December. A producer using a fiscal tax year is not eligible to participate in the AGR pilot program.

Group Risk Plan (GRP)--A plan of insurance that provides protection based on a county index. The Group Risk Plan (GRP) is available in many regions. The farm and county yield data can be matched to determine how well farm and county yields are correlated in different regions. These data are trend adjusted county data for a wider region than GRP now covers. In addition, the states of Wisconsin, South Dakota, and Nebraska each have county data based on harvested acre yields in this data set. Other states use county yield data based on planted acre yields. Forecasting uses procedures similar to GRP - a spline function with up to two linear trends. The forecast data can be used to make the trend line for the county yield. The difference between forecast yields and actual yields can be used to measure the extent to which the county yield is off trend.

Income Protection (IP)--An insurance plan that protects against reductions in gross income when yields or prices fall. The plan was developed using components from existing crop insurance programs. The multi-peril program protects against loss of production using the actual production history program and forms the foundation for income protection. The insurance unit is taken from the group risk plan. Combined these components form a straightforward product for the protection of a percentage of gross income.

Insurance Year/Insurance Period--The period beginning January 1 and extending through December 31 of the same year and corresponds to the period of coverage under the AGR policy.

Insurance Provider--A company reinsured by FCIC that provides crop insurance coverage to producers participating in any Federal crop insurance program administered under the Federal Crop Insurance Reform Act of 1994.

Insured--The named person as shown on the application accepted by the insurance provider. This term does not extend to any other person having a share or interest in any portion of the insured's farming operation (for example, a partnership, landlord, or any other person).

Insured Revenue--Income from the sale of agricultural commodities the insured produces, the sale of agricultural commodities the insured purchases for resale (not eligible for AGR coverage if the expected allowable income from agricultural commodities purchased for resale exceeds 50 percent of the total expected allowable income), and all other allowable income as defined in the AGR Policy.

Lag Year--The tax year immediately prior to the insurance year. Tax documents for the lag year will generally not have been filed with the IRS by the sales closing date.

Limited Coverage--A plan of insurance established by FCIC that provides coverage comparable to a level for a single crop that is equal to or greater than 50 (50%) percent of the approved yield indemnified at 100 percent (100%) of the expected market price but less than 65 percent (65%) of the approved yield indemnified at 100 percent (100%) of the expected market price.

Multi-Peril Crop Insurance--An insurance program to minimize risk and help protect farmers for loss of production below a predetermined yield, known as the unit guarantee which can be calculated using the producer’s actual production history.

Perennial Crop--An agricultural commodity that is produced from the same root structure for two or more years.

Revenue Assurance (RA)--Protects a producer’s crop revenue whenever low prices or low yields, or combination of both, causes the crop revenue to fall below the guaranteed revenue level.

Special Provisions--The part of the policy that contains specific provisions of insurance that may vary by geographic location.

Underwriting Review--A review of the applicant/insured's underwriting information by a person designated by the insurance provider (verifier or underwriter ) who is versed in the AGR program and is proficient in the knowledge and skills necessary to evaluate the grower's request for insurance.