Sugar Beet Stage Removal Option Pilot Program Approved

Risk Management Agency Program Announcement

Contact: James Callan (202) 720-8812
Shirley Pugh (202) 690-0437

WASHINGTON, January 6, 2004 -- The Federal Crop Insurance Corporation Board of Directors (FCIC Board) recently approved a Stage Removal Option Pilot Program for sugar beets, denied approval for multiple coverage levels on the same crop in the same county, and recommended changes in the Livestock Gross Margin (LGM) insurance for swine.

Beginning with the 2004 crop year, sugar beet producers may elect to purchase coverage without the first stage guarantee reduction in the event of an early season crop loss. The pilot program will be available in all states and counties where RMA currently offers sugar beet coverage except for California, Colorado, Nebraska and Goshen, Laramie, and Platte counties in Wyoming. The pilot option is not available to growers who purchase the catastrophic level of coverage.

"We are pleased to be able to respond to the needs of producers by developing products which better serve them and are actuarially sound," said Ross Davidson, FCIC Manager and RMA Administrator. "RMA is charged by Secretary Veneman and this Administration to serve American agricultural producers and at the same time, use sound judgment in the obligation of our allocated funds. The approval of this pilot program satisfies both those criteria."

The Board advised RMA that it is not in favor of pursuing the development of options that would allow different levels of coverage or plans of insurance for the same crop in the same county and crop year. The Board concluded these options would not be in the best interest of producers because of concern regarding program complexity, actuarial soundness and increased program costs.

In further action, the Board identified changes needed in the LGM program for swine to improve program integrity. The Board recommended that RMA discontinue new sales of LGM policies beginning with the January 2004 sales period. This suspension of sales will allow RMA to work with the private submitter of the LGM product to address the concerns raised by the Board and RMA. This action does not affect current LGM policyholders who may choose to purchase during the January 2004 sales period. Sales are expected to commence once changes are incorporated into the LGM policy.

Interested producers should contact their crop insurance agents regarding specific changes to these policies and eligibility requirements. A list of agents is available at local Farm Service Agency offices or by using RMA's Agent Locator at: http://www3.rma.usda.gov/tools/agents//.