Handling Added Land and Added Practices

In the world of Multi-Peril Crop Insurance (MPCI), the Actual Production History (APH) is the cornerstone of a producer's coverage. However, farming operations are dynamic. Producers frequently acquire new acreage or decide to implement new farming techniques, such as switching from dryland to irrigated production. These changes are categorized as Added Land and Added Practices.

Correctly establishing the approved yield for these new scenarios is critical for maintaining accurate coverage levels. If a producer fails to follow the specific procedures set by the Federal Crop Insurance Corporation (FCIC), they may end up with a yield that does not reflect their actual potential, or worse, they may face compliance issues during a loss adjustment. For a broader overview of how these concepts fit into the national program, see our complete Crop exam guide.

When a producer adds land to their operation in a county where they already have a policy, the Risk Management Agency (RMA) provides specific methods to determine the yield for that new acreage. The goal is to prevent the producer from having a zero yield or a yield that is significantly lower than their existing operation just because they lack historical data for that specific plot.

There are generally three ways to handle added land:

• New Database: If the added land is in a different section or unit, a new database must be established. If the producer has no history on this land, they may use a percentage of the Transitional Yield (T-Yield).
• Simple Average T-Yield: In many cases, if the producer has farmed the same crop in the county for a certain number of years, they may qualify for a yield based on a simple average of their existing APH databases in that county.
• Added Land Procedure: Under specific conditions, a producer can use the yield from an existing database if the added land is physically adjacent or shares similar soil characteristics.

An Added Practice occurs when a producer begins a farming method they have not previously used for that crop in the county. The most common example is a producer who has always farmed "Non-Irrigated" (NI) corn deciding to put in a pivot and farm "Irrigated" (I) corn.

Because the yield expectations for different practices vary wildly, the RMA does not allow producers to simply carry over their dryland yield to an irrigated database. Instead, the producer must establish a new APH database for the new practice. If the producer has no history of the new practice, they are typically assigned a percentage of the T-Yield. As they build history, the T-Yield components are replaced by actual yields.

Producers should be aware that to qualify for an Irrigated practice, they must have a reasonable expectation of having adequate water and the necessary equipment in place by the time the insurance attaches.

To ensure added land or practices are covered, producers must meet strict reporting requirements. All new acreage must be reported by the Acreage Reporting Date. Furthermore, the intent to use a new practice must often be declared by the Sales Closing Date, especially if it changes the type of policy or coverage level required.

Failure to accurately report the practice (e.g., reporting land as Irrigated when it was actually farmed as Non-Irrigated) can lead to a denial of claims or a significant reduction in indemnity payments. For those preparing for the licensing exam, practicing these scenarios is vital; you can find practice Crop questions here to test your knowledge on yield calculations.