Noninsured Assistance Program
Encyclopedia
In United States
agricultural law, producers who grow a crop that is currently not eligible for crop insurance
may be eligible for a direct payment under the Farm Service Agency
’s Noninsured Assistance Program (NAP). NAP has permanent authority under the Federal Crop Insurance Reform Act of 1994
, (P.L. 103-354, as amended).
To be eligible for a NAP payment, a producer first must apply for coverage under the program by the application closing date, which varies by crop, but is generally about 30 days prior to the final planting date for an annual crop. Like catastrophic crop insurance
, NAP applicants also must pay a $100 per crop service fee at the time of application. In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused by a natural disaster, or be prevented from planting more than 35% of intended crop acreage. For any losses in excess of the minimum loss threshold, a producer can receive 55% of the average market price for the covered commodity
. Hence, NAP is similar to catastrophic crop insurance coverage in that it pays 55% of the market price for losses in excess of 50% of normal historic production. A producer of a noninsured crop is subject to a payment limit of $100,000 per person and is ineligible for a payment if the producer’s qualifying gross revenues exceed $2 million.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
agricultural law, producers who grow a crop that is currently not eligible for crop insurance
Crop insurance
Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities...
may be eligible for a direct payment under the Farm Service Agency
Farm Service Agency
The Farm Service Agency is the USDA agency into which were merged several predecessor agencies, including the Agricultural Stabilization and Conservation Service . The ASCS was, as the FSA is now, primarily tasked with the implementation of farm conservation and regulation laws around the country...
’s Noninsured Assistance Program (NAP). NAP has permanent authority under the Federal Crop Insurance Reform Act of 1994
Federal Crop Insurance Reform Act of 1994
The Federal Crop Insurance Reform Act of 1994 is Title I of P.L. 103-354. Beginning with the 1995 crops, it modified the federal crop insurance program by authorizing a new catastrophic coverage level available to farmers...
, (P.L. 103-354, as amended).
To be eligible for a NAP payment, a producer first must apply for coverage under the program by the application closing date, which varies by crop, but is generally about 30 days prior to the final planting date for an annual crop. Like catastrophic crop insurance
Catastrophic crop insurance
Catastrophic crop insurance — A component of the federal crop insuranceprogram, originally authorized by the Federal Crop Insurance Reform Act of 1994 . CAT coverage compensates farmers for crop yield losses exceeding 50% of their...
, NAP applicants also must pay a $100 per crop service fee at the time of application. In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused by a natural disaster, or be prevented from planting more than 35% of intended crop acreage. For any losses in excess of the minimum loss threshold, a producer can receive 55% of the average market price for the covered commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
. Hence, NAP is similar to catastrophic crop insurance coverage in that it pays 55% of the market price for losses in excess of 50% of normal historic production. A producer of a noninsured crop is subject to a payment limit of $100,000 per person and is ineligible for a payment if the producer’s qualifying gross revenues exceed $2 million.