The Noninsured Crop Disaster Assistance Program (NAP), administered by the U.S. Department of Agriculture (USDA) Farm Service Agency (FSA), plays a crucial role in safeguarding the livelihoods of producers of non-insurable crops. By offering financial assistance, NAP helps protect Farmers and Ranchers against natural disasters that can lead to lower yields, crop losses, or even prevent crop planting altogether.

NAP Eligibility

Who Is Eligible for NAP?

To be eligible for NAP, a producer must be a landowner, tenant, or sharecropper who has an ownership share of that crop and/or grazing ground. There is also an income limit for eligibility: an individual’s or entity’s average adjusted gross income (AGI) cannot exceed $900,000.

Eligible Crops

Eligible crops include:

-Commercially produced agricultural commodities for which traditional crop insurance is not available, including those grown for food, fiber crops (like cotton and flax), controlled environment crops (like mushrooms and floriculture), specialty crops (such as honey and maple sap), and many others.

-Crops grown for livestock consumption, including grazing ground, grain, and forage crops.

Eligible Causes of Loss

NAP provides assistance for a range of eligible causes of loss, including:

-Damaging weather events like drought, freeze, hail, excessive moisture, excessive wind, or hurricanes.

-Adverse natural occurrences such as earthquakes or floods.

-Conditions related to damaging weather or adverse natural occurrences, such as excessive heat, plant disease, volcanic smog (VOG), or insect infestation.

Eligibility requires that these losses must occur during the coverage period, either before or during harvest, and must directly affect the eligible crop.

 

How It Works

Coverage Levels

NAP offers basic coverage, which is equivalent to the catastrophic level of risk protection insurance. This coverage kicks in when the loss exceeds 50 percent of expected production at 55 percent of the average market price for the crop. Producers can also opt for higher levels of coverage, ranging from 50 to 65 percent of production, in 5 percent increments, at 100 percent of the average market price. Producers choosing additional coverage must pay a premium in addition to the service fee. Notably, crops intended for livestock grazing are not eligible for additional coverage above basic coverage.

 

Applying for Coverage

Eligible producers can apply for NAP coverage using Form CCC-471, “Application for Coverage,” and pay the applicable service fee at their local FSA office. Socially Disadvantaged Producers such as women, limited resource, socially disadvantaged, and beginning farmers or ranchers may be eligible for basic NAP coverage with a waived fee and reduced premiums when they complete a valid CCC-860 certification. The application and service fee must be submitted by the application closing date, which varies by crop and is set by the FSA State Committee. Socially Disadvantaged Producers who choose not to participate in NAP must opt out on the CCC-860 form.

Service Fees and Premiums

Service fees for NAP coverage are the lesser of $325 per crop or $825 per producer per administrative county, with a maximum total fee of $1,950 for producers with farming interests in multiple counties. Producers who opt for higher levels of coverage must also pay a premium based on several factors, including their share of the crop, the number of eligible acres, approved yield, coverage level, average market price, and a 5.25 percent premium fee.

Socially Disadvantaged Producers who are eligible for waived fees and reduced premiums must meet specific criteria related to their farming experience and income levels.

Coverage Period

The coverage period for NAP varies, depending on the type of crop. For annual crops, it begins either on the date after the application is filed and service fees are paid or on the planting date, whichever is later. The coverage period for an annual crop ends when the crop is harvested, the normal harvest date arrives, the crop is abandoned, or the entire crop acreage is destroyed.

For perennial crops (excluding those intended for forage), the coverage period starts no later than 30 calendar days after the application closing date and ends when one of the following conditions is met: 10 months from the application closing date, crop harvest completion, normal harvest date, crop abandonment, or complete destruction of the crop acreage.

Information Required to Remain Eligible for NAP

To remain eligible for NAP assistance, producers must provide certain crop acreage information, including the name and type of crop, location and acreage, share of the crop, and planting practices. This information should be reported shortly after planting to ensure compliance with reporting deadlines.

Producers with NAP coverage must also provide production information, including the quantity of harvested production, disposition of the crop (whether it is marketable, unmarketable, salvaged, or used differently than intended), and verifiable or reliable crop production records when required by FSA.

Failure to report acreage and production information in a timely manner may result in reduced or zero NAP assistance. Reporting deadlines and final planting dates may vary by crop and region, so it is essential for producers to submit timely reports to their local FSA office.

Reported Acreage and Production

Acreage reports are crucial for recording the location and number of acres covered by NAP applications. These reports, along with production reports, are used to calculate the approved yield, which is the expected production for a crop year. The approved yield is based on a producer’s actual production history (APH) over a specified number of crop years, usually ranging from 4 to 10 years.

If a producer fails to report production for a crop with NAP coverage or reports fewer than four years of crop production, the approved yield may be calculated using substantially reduced yield data.

Providing Notice of Loss and Applying for Payment

When a natural disaster affects a crop or planting, producers with NAP coverage must promptly notify their local FSA office by completing the Notice of Loss portion of Form CCC-576 within 15 calendar days of specific events, such as a natural disaster occurrence, final planting date, damage to the crop, or the normal harvest date. For certain hand-harvested or perishable crops, this notification window is even shorter, requiring notification within 72 hours of a loss becoming apparent.

To receive NAP benefits, producers must complete the entirety of Form CCC-576, within 60 days of the last day of coverage for any NAP-covered crop in the unit. The form also requires acceptable appraisal information, evidence of production, and details on the crop’s marketability or use.

Defining a NAP Unit

A NAP unit comprises all eligible crop acreage in the county where a producer has a unique crop interest. This interest can either be 100% ownership or a shared interest with another producer.

Information Used to Calculate Payment

NAP payments are calculated on a per-unit basis, taking into account various factors such as crop acreage, approved yield, net production, the producer’s chosen coverage level, average market price, and a payment factor that reflects the decreased cost incurred for a crop that is not harvested or was prevented from being planted. For value loss crops with additional coverage, payments are based on the field market value before the disaster, or the maximum dollar value requested by the producer at the time of application.

Payment Limitations

NAP payments are subject to certain limits. For crops with basic (catastrophic) coverage, payments are limited to $125,000 per crop year, per individual or entity. For crops with additional (buy-up) coverage, the limit is $300,000 per crop year, per individual or entity.

The Noninsured Crop Disaster Assistance Program (NAP) is a vital safety net for producers of non-insurable crops, offering financial assistance when affected by natural disasters. By understanding how NAP works and staying informed, farmers and ranchers can better protect their agricultural investments and livelihoods when disaster strikes.

As always, subscribers to Ag Funding Assistance will receive convenient printable pdf forms, all program and contact information, and text message reminders 5 days prior to deadlines and closing dates to help you sign-up for NAP coverage through your local FSA office.