Agricultural News
Replant Requirements for ELS Cotton
Fri, 15 Apr 2022 08:33:50 CDT
Producers on the Texas High Plains considering Extra Long Staple Cotton insured under Written Agreement (WA) should be aware an ELS cotton policy includes some interesting and maybe unexpected requirements regarding crop damage and replanting determinations.
For ELS cotton to be insurable under a written agreement, the final plant date (FPD) for the written agreement is based on the county upon which the ELS written agreement is based. In the High Plains region, the majority of FPDs are based on Ward County, Texas or Eddy County, New Mexico, both of which have an FPD of April 30th.
Another important difference between an ELS policy and the Upland cotton policies we are more familiar with is that an ELS cotton policy has different rules when it comes to replanting a damaged or destroyed crop.
Like Upland cotton, the determination that it is practical to replant a damaged or destroyed ELS cotton crop is a decision made by the Approved Insurance Provider (AIP). The AIP's determination is governed by the U.S. Department of Agriculture Risk Management Agency's definition of practical to replant and based on an expectation of growing a successful crop.
What is different about the ELS policy, however, is that when an AIP determines it is practical to replant a producer must replant either ELS cotton or Upland cotton in order to maintain coverage under the ELS policy. When Upland cotton is replanted the ELS policy utilizes a calculation that converts the Upland cotton produced to an equivalent ELS cotton production amount that is used to determine if a loss was incurred under the policy.
A producer can decide not to replant ELS or Upland cotton when the AIP determines it is practical to replant. However, no coverage is provided. The acreage is removed from the acreage report, no indemnity is due, no replant payment is made and no premium is earned or payable.
According RMA policy, which is explained in the Frequently Asked Questions document "Double Cropping Revision and Practical to Replant" (https://www.rma.usda.gov/News-Room/Frequently-Asked-Questions/Double-Cropping-Revision-and-Practical-to-Replant), a producer is not required to replant a damaged crop, even when an AIP determines it is practical to replant, and has the option to plant a different crop instead.
In the FAQ RMA provides the following answers to the questions "Is a policyholder forced to replant their crop?" and "What if it is determined practical to replant and the acreage is planted to another crop?"
Is a policyholder forced to replant their crop?
No. However, in accordance with the crop insurance contract, if it is determined practical to replant the insured crop and it is not replanted, no coverage for the insured crop will be provided and no premium will be due.
Therefore, it is always the policyholder's choice whether to replant a damaged crop; however, if it is determined practical to replant by the approved insurance provider and the policyholder elects not to replant, no coverage is provided. The acreage is removed from the acreage report, no indemnity is due, no replant payment is made, and no premium is earned nor payable.
What if it is determined practical to replant and the acreage is planted to another crop?
The initially-planted crop that was lost and determined practical to replant is removed from the acreage report and no coverage is considered to have existed. If the policyholder decides to plant another crop instead of replanting the damaged initial crop, the crop planted may be insured provided it meets all insurability requirements and will be considered the first insured crop.
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