UNIVERSITY PARK, Pa. -- With the current, drought-afflicted growing season rapidly winding down, a farm-management specialist in Penn State's College of Agricultural Sciences says now is the time for producers to start thinking about crop insurance as a risk-management strategy for next year.

Although there was a major increase in the number of farmers using crop insurance in Pennsylvania this year, still only about 50 percent of eligible acres are covered compared to 80 percent or more in the Midwest, says Jayson Harper, professor of agricultural economics. He says several recent developments make crop insurance an even better risk-management tool for Pennsylvania farmers.

"Adjusted Gross Revenue insurance, or AGR, is now available in Berks, Carbon, Crawford, Columbia, Erie, Fayette, Lackawanna, Lancaster, Lehigh, Monroe, Northampton, Schuylkill, Westmoreland and York Counties," Harper says. "AGR insures the revenue for your entire farm --rather than individual crops -- by guaranteeing a percentage of average gross farm revenue, including a small amount of livestock revenue."

AGR covers loss of revenue during the current insurance year due to any unavoidable peril that occurs during the current or previous insurance year. The plan uses tax information from farmers' last five years to calculate the policy revenue guarantee. No more than 35 percent of expected allowable income can come from animals or animal products. Other application restrictions apply, and the last day to apply for 2003 AGR insurance is January 31.

Harper says a simplified version of AGR (called AGR lite) is being proposed by federal agencies for farmers with adjusted gross revenues of less than $100,000 and it may be available for Pennsylvania farmers in 2003. Unlike regular AGR insurance, farmers still would be eligible to participate if they have more than 35 percent livestock income if at least 30 percent of the animal feed (by weight) is produced on-farm. Also, farmers will not be required to get at least catastrophic levels of coverage for crops covered by multi-peril crop insurance (MPCI) in their county.

"Compared to the AGR program, AGR lite is much more flexible and would require less paperwork to apply," Harper says. "The program would make sense for many Pennsylvania farmers, and a USDA decision on approving the program will be made by the end of the year."

Farmers interested in crop insurance should contact a crop insurance agent to discuss the many new and existing options that are available, Harper says. Crop insurance is federally guaranteed and subsidized, but is sold through private insurance agents. A list of insurance agents licensed to sell crop insurance in Pennsylvania is available on the USDA Risk Management Agency Web site at http://www.rma.usda.gov. More information on insurance products and coverage can be found on Penn State's Pennsylvania Crop Insurance Education Web site at http://cropins.aers.psu.edu.

"Given the drought we experienced this past summer, managing risk is on everyone's mind," says Harper. "With the major improvements in crop insurance programs and additional federal and state subsidies, crop insurance costs about half what it did back in 1999.

"The state will make free CAT coverage available again this coming year, so all farmers, regardless of acreage or income level, should consider crop insurance as part of a risk-management plan for their farm. Farmers should contact a crop insurance agent early to sign up for crop insurance. Sign-up deadlines are November 20 for fruit crops, January 31 for AGR, and March 15 for spring-planted crops."

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EDITORS: Contact Jayson Harper at 814-863-8638 or jharper@psu.edu (e-mail).

Contact: Gary Abdullah gxa2@psu.edu 814-863-2708 814-863-9877 fax #276