This sheet offers a quick overview of the common terms and procedures associated with adjusted gross revenue insurance. AGR is a complex insurance to understand. Your experienced Crop Growers insurance agent will work closely with you to answer your questions, choose a level of coverage and provide a personalized quote.

Overview

• AGR provides protection against low revenue due to unavoidable natural disasters and market fluctuations that occur during an insurance year.
• AGR insures revenue of an entire farm rather than an individual crop.
• AGR guarantees a percentage of average gross farm revenue based on a producer’s historic Schedule F tax information (1997 to 2001 tax return) and annual farm report.
• AGR also provides insurance coverage for multiple agricultural commodities under one insurance product.
• AGR provides coverage for operations with total revenues that increase each year.

Counties covered by AGR

New England: (Conn., Maine, Mass., N.H., R.I., Vt.): All counties
New York: Cayuga, Chautauqua, Erie, Genesee, Monroe, Niagara, Onondaga, Ontario, Orange, Orleans, Oswego, Seneca, Suffolk, Ulster, Wayne and Yates counties
New Jersey: All counties
Pennsylvania: Berks, Carbon, Columbia, Crawford, Erie, Fayette, Lackawanna, Lancaster, Lehigh, Monroe, Northampton, Schuylkill, Westmoreland and York counties.
AGR Lite is available in all counties in New England, New York, New Jersey and Pennsylvania.

Covered farm revenue

• Income from agricultural commodities raised, including incidental amounts of income from animals and animal products
• Farm income from commodities bought and resold
• Cooperative distributions related to the sale of agricultural commodities. Farm Credit patronage distributions are not included.
• CCC loans and forfeits

Farm revenue not covered

• Other off-farm income
• Crop insurance payments
• Variable cost of post-production operations, such as sorting, packing or packaging

Producer eligibility

• You must carry multi-peril crop insurance (MPCI) on commodities that make up 50 percent or more of revenue. (If MPCI is available for the commodity.)
• You must have tax records for 1997 to 2001 in same name or a materially similar entity you were part of.

Program restrictions

AGR is not available to you if:

• You derive more than 35 percent of your income from animals, or animal products
• More than 50 percent of your revenue comes from commodities purchased for resale
• More than 83.35 percent of your revenue is from potatoes

Coverage levels

You can select one of the following coverage levels. The first number is your coverage level (your guaranteed indexed gross revenue) and the second number is the payment rate. If you select 65%/75% for example, you are guaranteed 65 percent of your indexed gross revenue and you will be paid $0.75 for every dollar that your revenue is below that guarantee.

Note: Income diversification is required for higher coverage levels.

• 65%/75% (Everyone qualifies)
• 65%/90% (Must meet two-crop revenue qualifier)
• 75%/75% (Must meet two-crop revenue qualifier)
• 75%/90% (Must meet two-crop revenue qualifier)
• 80%/75% (Must meet four-crop revenue qualifier)
• 80%/90% (Must meet four-crop revenue qualifier)

Most popular coverage levels

• 65/75. Only level available for growers with just one commodity of significance
• 75/90. Usually elected by farms with two or more commodities and with the second largest commodity more than 17 percent of gross sales
• 80/90. Available to growers with four or more commodities and with the fourth largest commodity more than 7 percent of gross sales

Premium estimates

• Higher premiums are charged for higher risk geographic areas and crops (cherries, apples)
• Lower premiums are offered to operations with diversity, such as in number of crops or percentage of dollars from each crop
• Discounts up to 50 percent are available if you also carry MPCI
• For a preliminary quote, visit http://www3.rma.usda.gov/apps/premcalc. See your agent for a customized estimate and an in-depth explanation of the program.

Indexing your gross revenue

• AGR allows you to index your growth in revenue each year
• Crop Growers multiplies a growth factor by your average revenue to calculate the insurable amount. See your agent for details.

Loss calculation

AGR policies cover yield and price fluctuations. Income is calculated on an accrual basis in a loss year after taxes are filed:

• 2002 carryover payments and post production costs are subtracted
• Unsold inventory (valued at market value on day one of loss month) and receivables are added

Loss example

Joe Farmer has an indexed average allowable revenue of $480,000. He produces at least two commodities that are significant portions of his revenue, and he chose a coverage level of 75/90. Joe experiences a loss in revenue and has an accrual revenue of $310,000. To determine his loss, Joe ran the following calculations. He determined he would receive a payment of $45,000.

Information you need to apply for AGR

• Five years of Schedule F forms
• Annual farm report
• Historic yearly enterprise revenue
• Estimated enterprise revenue
• Beginning inventories
• Commodity, number of acres, prices expected revenue, etc.

Important dates

Click here for a printable copy of the application.

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