Producers with Grain Quality Questions Urged to Contact Crop Insurance Agents and Companies

September 28, 2009

OVERLAND PARK, KANSAS…National Crop Insurance Services (NCIS) is urging farmers with grain quality concerns to contact their crop insurance agent or company to determine coverage options in case of damage to crops from disease, weatherrelated events, or other causes.

“While we, like everyone, are closely monitoring the mycotoxin situation and potential frost,” said Bob Parkerson, President of NCIS, “the key to protection is being proactive. Our job is to ensure that farmers have what they need to make informed decisions so that they can manage their risks and go about the business of farming.”

Part of the information farmers need to understand is exactly what quality adjustment is under the Federal crop insurance program. NCIS is providing some general guidance on quality adjustment, but stresses that since details vary, farmers should contact agents and companies directly.

Quality adjustment is a process that reduces the quantity of mature production when it meets the requirements provided in the crop’s policy provisions. This adjusted production to count is used for indemnity and actual production history purposes. Corn, Grain Sorghum, Soybeans, Sunflowers, Barley, Rye, Wheat, Canola, Flax, Oats, and Safflowers are grain crops that have additional quality adjustment statements in the Special Provisions of Insurance, which are a part of the crop’s respective county actuarial documents. The crop policy and the special provisions lists the types and levels of quality deficiencies that are covered, describes how and under what circumstances the various discounts will be applied and specifies who must obtain the samples and who can perform the determinations.

For example, the quality (excluding mycotoxins) of the grain for Crop Insurance purposes may be determined by:

  • A grader licensed under the United States Grain Standards Act or the United States Warehouse Act (USWA);
  • A grader licensed under State law and employed by a warehouse operator who has a storage agreement with the Commodity Credit Corporation (CCC); or
  • A grader not licensed under State law, but who is employed by a warehouse operator who has a commodity storage agreement with the CCC and is in compliance with State law regarding warehouses.

For substances or conditions injurious to human or animal health (mycotoxins), samples must be analyzed by an approved laboratory that:

  • Is a disinterested third party;
  • Performs quantitative tests that are certified by Federal Grain Inspection Service (FGIS); and
  • Is a recognized commercial, governmental, or university testing laboratory.

For certain mycotoxins, such as aflatoxin, representative samples of the grain must be taken before the grain is moved into commercial or on‐farm storage.

Policyholders should contact their crop insurance agent or insurance company if they have questions about their crop insurance coverage or responsibilities.

National Crop Insurance Services (NCIS) is a nonprofit trade association representing all of the private insurance companies who sell and service Federal crop insurance policies.