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Common Land Unit Acreage Reporting Plan

Common Land Unit Acreage Reporting Plan. 2012 Crop Insurance Workshops Drought, Politics and Risk Management Strategies October 30 – November 2, 2012 Troy Brady, Vice President Data Quality & Systems Design National Crop Insurance Services. Industry Role.

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Common Land Unit Acreage Reporting Plan

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  1. Common Land Unit Acreage Reporting Plan 2012 Crop Insurance Workshops Drought, Politics and Risk Management Strategies October 30 – November 2, 2012 Troy Brady, Vice President Data Quality & Systems Design National Crop Insurance Services

  2. Industry Role NCIS serves as the primary service organization for the crop insurance industry.

  3. NCIS Functions • MPCI and Crop-Hail Program Development and Analysis • Policy Analysis, Loss Adjustment Procedures, Legal Analysis, Agronomic Research • Economic and Actuarial Analysis • Education and Training • Loss Adjuster Schools – 17 (1,692 attendees) • National Conferences – 5 (1,037 attendees) • Annual Regional/State Meetings – 14 (531 attendees) • Crop-Hail Advisory Organization and Statistical Agent • Licensed by Individual State Insurance Department • Public Relations and Industry Outreach

  4. Objective To provide a history of the United States Department of Agriculture (USDA) Risk Management Agency’s (RMA) efforts to convert acreage reporting to a common land unit (CLU) basis, outlining the requirements and impacts of these efforts for Approved Insurance Providers (AIP), agents and the insured producer.

  5. Agenda • Definition and examples of a Common Land Unit • Background of RMA’s efforts to adopt acreage reporting by CLU • Brief overview of USDA’s Acreage Crop Reporting Streamlining Initiative (ACRSI) and its requirements for acreage reporting by CLU • Requirements of RMA’s CLU implementation plan outlined in RMA Bulletin IS-12-002 • Resources available to AIPs and agents to facilitate acreage reporting by CLU • Impacts to AIPs, agents and insured producers to report acreage by CLU • Industry efforts to address issues arising from the adoption of acreage reporting by CLU

  6. What is a Common Land Unit (CLU)? In Farm Service Agency terminology, a CLU is an individual contiguous farming parcel, which is the smallest unit of land that has: 1. A permanent, contiguous boundary 2. Common land cover and land management 3. A common owner, and/or 4. A common producer association.

  7. CLU Identification • The Acreage Crop Reporting Streamlining Initiative (ACRSI) defines a CLU as the smallest area of land with the same land classification and ownership that has a permanent contiguous boundary. Permanent boundaries may include: field boundaries, fences, rivers, creeks, grass waterways, tree/forest lines or other similar features. • A CLU can be subdivided or contain subfields that are separated from the balance of the field by a temporary boundary that may change from year to year. Subfields may be established annually and may represent different commodities, cropping patterns, etc. that can be identified by temporary boundaries. The CLU subfields will retain the CLU identifier.

  8. CLU Identification • A CLU is identified by FSA farm, tract, and field numbers. • FSA also assigns each farm, tract, and field a unique identifier called the CLU ID. The CLU ID is a globally unique identifier (GUID) that is system generated, primarily used by automated systems, and generally not known by the producer.

  9. CLU Example #1 Rectangular fields outlined by CLU boundaries

  10. CLU Example #2 Center pivot irrigation with non-irrigated corners in separate CLUs.

  11. Acreage Reporting By CLU • Originated with the 2010 SRA in Appendix III (A-III) on 6/30/2009 • Companies were required to report 20% of their insured acreage by CLU by the annual settlement date (Feb, 2011) • RMA issued IS-10-004 on 7/9/2010 to clarify the new A-III reporting requirement • Producers could voluntarily provide the FSA Farm Number, Tract and Field to identify CLU information when reporting acreage; or AIPs could derive CLU information from USDA’s Comprehensive Information Management System (CIMS) data or other sources to provide the FSA FN, Tract and Field to identify CLU information for the acreage reported by producers

  12. Acreage Reporting By CLU • In determining total acres, RMA included acreage for RA, CRC and Yield Protection insurance plans for those counties where RMA has provided valid CLU shape files by 5/1/2010 • All CLU records reported applied toward the 20% minimum reporting requirement • AIPs could choose which units to submit CLU records for, but the FSA FN, Tract, Field Numbers must be reported for all acreage in the unit • AIPs that do not demonstrate substantial compliance with this reporting requirement may be subject to penalties under Section IV.(H) of the Standard Reinsurance Agreement

  13. CLU Data Reporting • Acreage reporting remains on a county/commodity/unit/type/practice/t-yield map area (TMA) basis • CLU reporting was implemented as a sub-division of the acreage line and is reported separately: • For our center pivot with non-irrigated corners example: • Acreage Line 1 Unit 00100 159.71 Irrigated acres • CLU # 1 references Acreage Line 1 with 159.71 acres • Acreage Line 2 Unit 00200 38.41 Non-Irrigated acres • CLU # 2 references Acreage Line 2 with 9.71 acres • CLU # 3 references Acreage Line 2 with 10.21 acres • CLU # 4 references Acreage Line 2 with 8.5 acres • CLU # 5 references Acreage Line 2 with 9.99 acres

  14. Increasing Requirement for 2011 • The draft 2011 SRA issued 12/4/2009 expanded on this requirement • Companies were required to report by CLU 35% of their insured acreage for additional coverage policies under Yield Protection, Revenue Protection (RP) and RP with Harvest Price Exclusion insurance plans by February following the reinsurance year (Feb, 2012)

  15. So Where is RMA Headed with CLUs? • During 2010 SRA negotiations RMA was asked for a timeline to convert acreage reporting to a CLU basis over the life of the SRA • Informational Memorandum IS-12-002 was issued in response to this request

  16. So Where is RMA Headed with CLUs? • In July 2010 USDA initiated a “Retrospective Review Under E.O. 13563; Improving Common Acreage Reporting Processes” • Originally published in the Federal Register 4/20/2011 and later modified on 7/19/2011 • The goal of ACRSI is to establish common data elements and automated processes for producers to report common information for USDA programs, simplify and reduce the reporting burden on producers, and reduce USDA administrative and operating costs by sharing similar data across participating agencies • ACRSI recommendations called for common USDA reporting standards, such as entity types, acreage reporting dates, commodities, acreage location, and production terminology

  17. So Where is RMA Headed with CLUs? • MGR-11-017, “Request for Comments to Actual Production History (APH) Potential Enhancements”, envisions “Correlating producer and land experience into the production guarantee”

  18. IS-12-002 • Acreage reporting at a CLU level will continue to increase each year through 2016 when 100 percent of all acreage for applicable plans of insurance will be required to be reported by CLU • 2012: 50% of the total acreage for additional coverage policies under insurance plans 01, 02 and 03 by February 2013 • 2013: 70% of the total acreage for additional coverage policies under insurance plans 01, 02 and 03 by January 2014 • 2014: 90% of the total acreage reported for insurance plans 01, 02, and 03 (catastrophic and additional coverage) by December 2014

  19. IS-12-002 • 2015: 95% of the total acreage reported for all applicable insurance plans and coverage types (e.g. catastrophic, additional), as provided in A-III, by November 2015 • 2016: 100% of the total acreage by CLU for all applicable insurance plans and coverage types (e.g. catastrophic, additional), as provided in A-III • Insured must certify acreage by CLU for all applicable plans • CLU data must be displayed on the Acreage Report • Increasing the percentage requirement over several years allows AIPs flexibility to fully integrate CLU reporting to best meet the routine activities of agents, policyholders, AIPs and RMA.

  20. IS-12-002 • RMA has confirmed that the Common Crop Insurance Policy Basic Provisions legally support collection of acreage reporting data by CLU from the insured • IS-12-002 is a roadmap • Modifications, including collecting acreage reports by CLU for perennial crops, actions by USDA such as Farm Bill Amendments or ACRSI developments, may be required • AIPs will only be required to submit policy information by CLU when a CLU is available from FSA.

  21. CLU Reporting Resources • CIMS provides AIPs access to state geospatial files of CLU polygons • Used to identify field boundaries • Released approximately every two months for the entire state in which the AIP operates • Producers provide planting records for each of their CLU polygons • AIPs may electronically request from CIMS the current year and prior year FSA acreage report information from the FSA Form 578 for their policyholder • Producers may provide their FSA Form 578 • The total acreage used to calculate the annual % will be determined using only reported acreage for those counties where CIMS has provided complete and valid CLU data in each of the GIS CLU files released from February prior to the RY through December of the RY • For 2012: Feb 2011 - Dec 2011

  22. Impacts to Agents • RMA anticipates advancements in geospatial information systems and software that will provide the opportunity to use precision agriculture technology as well as AIP utilization of mapping technologies to facilitate collection of acreage reports by CLU • RMA will work with AIPs, FSA and other USDA agencies to develop procedures and requirements to encourage the use of this technology, as well as to simplify the use of CLUs to reduce the burden on AIPs in reporting acreage by CLU, and the USDA in maintaining the CLUs • Heightened importance with Acreage Reporting Date moving to 7/15 under ACRSI with an 8/15 billing date as a result of the 2008 Farm Bill

  23. Impact to Insured Producers • RMA believes that acreage identified by CLU location can be used to: • Improve actuarial soundness • Enable the acreage to be correlated with other types of data such as soils, slope, elevation or weather • Reduce duplicative reporting by the producer • Enable the efficient sharing of RMA data with Approved Insurance Providers (AIPs), Farm Service Agency (FSA) and other USDA agencies • Reduce program vulnerabilities • Assist with compliance efforts • Realization of the full benefits and program improvements lies in the future; however, to achieve such benefits it is imperative to make progress in obtaining more refined data

  24. Issues with CLUs • CLU files are created and maintained by FSA • A number of issues with using CLU shape files • CIMS Location State is NULL (44,422 CLUs) • CLU Identifier has Invalid Characters (364,897 CLUs) • CLU Identifier is Duplicated (208,439 CLUs) • Location County Code is NULL (98,369 CLUs) • Farm Number is Zero (32,569 CLUs) • Tract Number is Zero (995 CLUs) • Field Number is Zero (32,569 CLUs)

  25. Industry Efforts to Resolve CLU Errors • Ongoing discussions with RMA through NCIS’ Technology & Information Processing (TIP) Committee • RMA sends error listings to FSA after validating each iteration • Industry meetings with Undersecretary Scuse • FSA expects most issues to be resolved when they introduce their Modernize and Innovate the Delivery of Agricultural Systems (MIDAS) project in January 2013 • Industry formed a Production Reporting Workgroup earlier this year • Extend transition to 2016 to even out annual increases • Deferring perennial crop reporting until CLU reporting issues can be resolved • Reviewing CLU issues and potential means to mitigate impacts • Modifying CIMS filters to ensure successful inquiry • Modifying validation requirements

  26. NCIS Website www.ag-risk.org Crop Insurance in America Website www.cropinsuranceinamerica.org Support Crop Insurance Website www.supportcropinsurance.org Twitter @USCropInsurance Facebook CropInsuranceInAmerica YouTube NCISAmerica Questions/Comments about today’s presentation: troyb@ag-risk.org

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