USDA announced on June 1st a new initiative to reward the planting and certification of cover crops through RMA’s Pandemic Cover Crop Program (PCCP).
All the information (press release, FAQs, Notice of Funds Availability (NOFA – the legal documentation)) are available at this link: https://www.rma.usda.gov/en/News-Room/Press/Press-Releases/2021-News/Producers-with-Crop-Insurance-to-Receive-Premium-Benefit-for-Cover-Crops.
Even with this information, there are a lot of questions. Heritage had a call with RMA late yesterday afternoon. What follows are some key takeaways that we hope will be helpful as you answer questions from your farmer customers:
- RMA does not have great expectations this will affect many producers. Only about 2 million acres nationwide are certified to cover each year. It was roughly 5 million acres in 2019 after the massive flooding in the Midwest, but dropped back to 2 million in 2020. Other recent or current programs (MFP, CFAP, and even annual forage crop insurance policies) have incentivized farmers to certify what could be cover crop acreage as crop acreage, so RMA expects the total number this year could increase to a maximum of perhaps 7 million acres nationwide. Bottom line, this program will be on the margins, and at a $5 per acre credit it is not expected to really change practices.
The only requirement is the farmer must certify his cover crops as cover with the FSA office by 6/15, and that certification must match up at the field level (based on CLU) with insured acreage for the spring of 2021 that will be reported by the normal crop insurance process. Bottom line, make sure if you have planted a cover crop this sping you need to certify by June 15th!
- Two questions we have received this morning: (Q1) What if a cover crop was planted late last summer or fall and was certified by FSA (with late pandemic-related extended deadlines) on the 2020 report? The normal reporting deadline for cover crops is July 15. (A1) According to RMA, if the intended benefit of the cover crop was for the 2021 crop year, then a correction and certification of that cover crop for 2021 should be allowed so the acreage could qualify for PCCP on spring insured crops. (Q2) And what if the cover was planted in the fall, and has since been destroyed leaving no visible evidence . . . can it still be certified? (A2) “We have brought up the issue of a long since terminated cover crop with FSA and things like seed receipts can be used if there are disputes on the veracity of the producer’s report.”
- The basic rule is this: if you have a cover crop in 2021 that is certified as a “cover crop” with FSA by 6/15, and if this certification is on the same field as an insured crop that is certified at the field level for the spring of 2021, then RMA through the AIP billing systems will provide a credit of $5 per acre on producer-paid premium for the number cover crop acres certified (note: if producer premium is <$5 per acre, then the credit would max out at the premium owed).
Please do note FSA county offices only learned about this program — and its earlier 6/15 deadline — yesterday afternoon. Be patient with them as they are working through this as a completely new program and they will largely bear the burden of completing these certifications in the next two week (by 6/15) .