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Pecan Tree Insurance Policy

Alabama Pecan Growers Association 57th Annual Meeting

Fairhope, AL September 21, 2017 Jeanne Lindsey, PhD RMA, Valdosta RO

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Pecan Tree Program Counties 2018 CY

Policy Basics

Item Values Sales closing May 15, 2017

Coverage attachment July 1, 2017

Contract change January 31, 2018

Cancellation/termination June 30, 2018

Available units BU, OU, EU

Coverage levels CAT, 50 – 75% CL

Minimum acreage 5 ac, with min tree/ac

Insurable practices Irr /NI by conventional or

organic

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What is Covered?

• Base Policy: – Replacement or rehabilitation costs plus

maintenance expenses – Paid as a lump sum

• Comprehensive Tree Value Endorsement: – Lost revenue for a destroyed tree that requires

removal and replacement – Fifty percent paid up front; balance paid after

replanting completed – Not available with CAT policies

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Insurability Requirements

• Grown in the county; have a share • Adapted to the area • Potential to produce yield of a healthy tree • Grown in a commercial orchard • Orchard is minimum of 5 acres

• minimum number of trees per acre Exclusions: • Less than 2 year set out • Unsound, diseased, or unhealthy • Damaged and not reset or rehabilitated • Inspected and considered unacceptable

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Causes of Loss

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Wind

Freeze damage: 3rd – 5th crop year after set-out

Freezing rain (ice damage)

Flood

Fire

Damage Definitions

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Destroyed • Toppled or leaning and reset not

possible

Fully Damaged • Damage that requires rehabilitation

or resetting (not destroyed)

Partially Damaged • Pruning greater than 10% of

canopy required

Tree Prices for Guarantees

Stage Trunk Diameter ABH RM1 RM2

I < 6” $93 $82

II 6.01 – 10” $181 $163

III 10.01 – 15” $215 $206

IV 15.01 – 20” $247 $228

V > 20” $286 $262

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RM1 – Remove and Replant RM2 – Cut and Replant

RM3 – Rehabilitation RM4 – Reset (stages I – III)

Insurable Variety Groups

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Group 1 Group 3Amling Baby B Headquarters Cape Fear

Apalachee Byrd Mandan DesirableElliott Caddo McMillan FarleyForkert Carter Morrill Giftpack

Frotscher Creek Nacono PawneeKanza Cunard Oconee SchleyKiowa Curtis Stuart SuccessMahan Eclipse Sumner

Money Maker Ellis Van DemanMoreland Excel ZinnerShoshoni GaffordSurprize Gloria Grande

Group 2

Based on wind and ice damage tolerance.

Occurrence Loss Option (OLO)

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Replace deductible with 2% minimum threshold

May elect with Comprehensive Tree Value Endorsement (CTVE)

Not available with catastrophic coverage (CAT)

Common Questions

• How much does it cost?

• Do I have to remove/replace, reset or rehabilitate the tree to get paid?

• Do I have to insure trees I plan to sequentially thin?

• What are the lease requirements?

• Can the landlord have a Pecan Tree policy and the tenant have a Pecan Revenue policy?

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Pecan Tree Program – AIB www.rma.usda.gov

2017 Reinsurance Year

2018 Crop Year

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2018 Pecan Revenue Change

Hedging • No penalty if done in

accordance with recommended practices.

Rate Review

2018 Pecan Revenue Change

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Sales Closing May 15 • Application • Acreage Report • Pre-Acceptance Worksheet • Grove Map • Summary of Revenue (for higher CTVE prices) Contract Change Date: January 31 Contact your crop insurance agent for more information!

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Pecan Tree Insurance Policy

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)

Questions