June 25, 2019 | Updated: July 5, 2019
This year's difficult planting conditions have many Ontario farmers looking for more information about how their unseeded acreage benefit (USAB) for Production Insurance works in different situations. Agricorp has compiled questions and answers, along with an example payment scenario, to help farmers get the information they need to make important business decisions in the coming weeks.
What is USAB for grains and oilseeds?
The unseeded acreage benefit (USAB) is a feature of Production Insurance that compensates producers unable to plant a spring-seeded crop by the planting deadlines due to an insured peril, other than drought.
USAB helps farmers offset financial burdens, such as fixed costs and maintenance, and may give customers more flexibility in their business decisions.
How do I know if I have USAB coverage?
If you are eligible for USAB, the benefit is included in your coverage when you renew or enrol in Production Insurance. To be eligible, customers must insure all insurable spring-seeded grain and oilseed crops.
How much does USAB pay?
USAB payments reflect one third of the value of a producer's average farm yield (AFY).
How is the USAB payment calculated?
USAB payment = USAB benefit rate × 1/3 AFY × (unseeded acres - deductible) - ($1 × unseeded acres)
How are USAB benefit rates set?
USAB rates are set annually and are based on forecasted market prices.
What are the USAB benefit rates for corn and soybeans?
The USAB benefit rate for corn is $4.70 per bushel for customers who have float price coverage and $4.00 for customers who have fixed price coverage.
The USAB benefit rate for soybeans is $10.75 per bushel for customers who have float price coverage and $9.15 for customers who have fixed price coverage.
For a sample calculation, see the USAB example scenario below.
What crop is used for USAB payments?
Each year, customers can select a crop to be used for USAB payments. The selected crop is listed on renewal forms as the "dominant crop."
For grain and oilseed customers, the selected crop does not have to be the crop with the most acreage. The selection must be a:
- Crop that the producer normally insures
- Spring-seeded crop
- Grains and oilseeds crop
: If a selection is not made, the dominant crop on the producer's coverage will default to their last year's eligible crop with the most acreage.
Can I change the crop that my 2019 USAB payment is based on?
Yes. For 2019, Agricorp is allowing you to select the crop your USAB payment is based on in good faith, to ensure you have the right coverage.
What is the deadline to change the crop that my 2019 USAB payment is based on?
Normally, the deadline to make changes to your Production Insurance coverage is May 1.
Because of the planting delays, this year you have more time to change your selected crop for USAB. You can change your selected crop for USAB by your acreage-reporting deadline – all in one call.
What is the deadline to report my unseeded acres?
Normally, the deadline to report unseeded acres is June 15.
Because of the planting delays, this year you have more time to report your unseeded acres. You can report unseeded acres by your acreage-reporting deadline – all in one call.
Is there a deductible for USAB payments?
USAB payments are subject to a deductible. One of the following deductibles is applied:
- For tiled land – the deductible equals one per cent, or three acres, of land still unseeded (whichever is greater).
- For untiled land – the deductible equals three per cent, or six acres, of land still unseeded (whichever is greater).
How much is the USAB premium?
The USAB premium is $1 per unseeded acre. Producers pay their USAB premiums and receive their USAB payments all at once. Producers only pay a premium if they have unseeded acres.
Am I eligible for a USAB payment if I plant an alternative crop before its planting deadline?
No. If you cannot plant your intended crop and choose to plant an alternative crop by its planting deadline, that alternative crop would be eligible for Production Insurance coverage, not a USAB payment. The coverage on the alternative crop would include a reseeding benefit and production coverage for 2019.
Am I eligible for a USAB payment if I plant a crop after its planting deadline?
Yes. Farm management decisions are always left up to the individual farmer, and some may choose to plant cover crops or plant a crop after the deadline.
If you choose to plant crops after their planting deadlines, you may receive a USAB payment. In this case, customers need to notify Agricorp before they plant and the crop would not be insured for 2019.
Am I eligible for a USAB payment if I choose not to plant by the extended planting deadline?
Yes. If you choose not to plant during the planting extension period, you may still be eligible for USAB.
How do I make a USAB claim?
For 2019, report unseeded acres to Agricorp by your acreage-reporting deadline.
How does RMP cover my unseeded acres?
If you are enrolled in RMP: Grains and Oilseeds, the dominant crop you select for Production Insurance will also apply to your RMP coverage.
Any eligible unseeded acres are counted in your RMP coverage.
For a sample calculation, see the USAB example scenario below.
USAB example scenario
Sam's farm is located in Lambton County where he has grown and insured corn and soybeans for the past five years. This year, Sam intended to plant 100 acres of corn and 100 acres of soybeans on tiled land.
Because of the wet weather, Sam was only able to plant 50 acres of soybeans and no corn.
For 2019, Sam can select one crop that will be used for both his USAB and RMP coverage as outlined in the examples below.
Example 1 – Unseeded acres based on corn
Sam selects to have his USAB payment based on corn as his dominant crop
Example 2 – Unseeded acres based on soybeans
Sam selects to have his USAB payment based on soybeans as his dominant crop
|Unseeded acreage benefit
|USAB = USAB benefit × 1/3 AFY × (unseeded acres – deductible) – ($1 × unseeded acres)
$4.70 × (1/3 x 185) × (150 - 3) - ($1 × 150)
$10.75 × (1/3 x 48) × (150 - 3) - ($1 × 150)
|Eligible acres for RMP coverage
Corn acres: 150 (total unseeded acres)
Soybeans acres: 50 (seeded acres)
Corn acres: 0 (seeded acres)
Soybean acres: 200 (unseeded plus seeded acres)
For information about options for unseeded acres, read OMAFRA’s
Cover Crop Options for Unseeded Fields.