Crop insurance availability varies by state and county, leaving many crops ineligible for coverage through USDA’s Risk Management Agency (RMA). With the passage of the 2014 Farm Bill, the Noninsured Crop Disaster Assistance Program (NAP) has been revamped to better serve producers growing non-insurable crops by increasing coverage levels and expanding the reach of the program. NAP, run by the Farm Service Agency (FSA), helps level the playing field for organic and diversified farmers while providing incentives to beginning, socially disadvantaged, and limited resource farmers to enroll.
Learn More about the Noninsured Crop Disaster Assistance Program!
NAP is a form of USDA-administered financial assistance for producers of non-insurable crops. In the event of a natural disaster that causes crop losses or prevents planting, NAP enrollees can receive payment on their lost crop to help recoup their expenses for the year.
Despite its similarities to crop insurance, NAP is separate from the Risk Management Agency-run federal crop insurance program. It is administered by FSA along with other disaster assistance programs.
While NAP is not a new program, the 2014 Farm Bill made changes to make it a more effective safety net for those with uninsurable crops, often diversified and organic producers. Previously, NAP would only cover 50 percent of the crop and then only pay 55 percent of the crop’s value. Now, NAP covers 100 percent of the crop’s value and a farmer can buy coverage for up to 65 percent of their crop’s value. NAP will now also cover the organic, direct market, fresh, and processing crop values when adequate pricing data is available.
Producers with Adjusted Gross Incomes under $900,000 are eligible to apply. Beginning (farming less than 10 years), limited resource (earning less than $176,800 per year and having a total household income below the poverty line), and socially disadvantaged farmers (women, African American, Native American, Asian, and Hispanic producers) have their service fee waived and their premiums reduced by 50%.
Eligible crops include specialty crops (including vegetables), crops planted and grown for livestock consumption, crops grown for fiber, seed crops, feed stocks for renewable biofuels, or crops grown in a controlled environment like mushrooms and floriculture. Any crops eligible for certain RMA insurance products are not eligible. If you are wondering if your crop is eligible, look it up in the NAP Crop Eligibility, Premium, and Payments Estimator tool even if you think there may be a RMA policy available. Farmers utilizing RMA’s Whole Farm Revenue Protection Policy can also enroll in NAP, but cannot collect from both when there is a loss.
Eligible causes of loss include drought, freeze, hail, excessive moisture, excessive wind or hurricanes, earthquakes, foods, excessive heat, plant disease, volcanic smog, or insect infestation. Moreover, these events must occur during the coverage period either before or during a harvest, and the natural disaster must directly affect the eligible crop.
Following a natural disaster, farmers must report it to their FSA office within 15 calendar days of the occurrence and for some hand-harvested and certain perishable crops losses must be reported within 72 hours of the loss becoming apparent.
Since the changes to NAP are just taking effect, the level of take-up for and interest in the NAP by farmers is not yet known. Since the changes to NAP were made to expand its availability and coverage, it is expected to be more farmer-friendly than its pre-farm bill version.
Examples of the types of farms that will be able to enroll in and benefit from NAP include:
Eligible producers must apply for coverage at their local FSA office. Service fees must be paid at the same time as application submission, and both must be received prior to the application closing date. Closing dates vary by state and crop, and may be during the year prior to planting.
For more information on application closing dates and coverage periods, please contact your local FSA office for state-specific information. Additional information can be found on FSA’s NAP page, and crop eligibility can be accessed in this USDA NAP eligibility tool.
Beginning, limited resource, and socially disadvantaged farmers should be prepared to file Form CCC-860 “Socially Disadvantaged, Limited Resource and Beginning Farmer or Rancher Certification” in order to wave the service fee and premium reduction at the time of enrollment.
To receive NAP benefits, producers must fill out Form CCC-576 “Notice of Loss and Application for Payment” within 60 days of the end of the coverage period for the particular NAP covered crop. Individuals must provide evidence of production and note whether the crop was marketable, unmarketable, salvaged, or used differently than intended.
More Information on NAP from FSA
NSAC Information on NAP
NAP was first introduced in the 1994 Farm Bill in an effort to move away from ad hoc disaster programs and establish a safety net of risk protection for noninsurable crops.
With the passage of the 2014 Farm Bill, the NAP program has given these producers a more favorable system allowing for election of higher coverage rates based on 100% of a crops value for crop losses when disasters wipe out over half of crop, either by preventing planting or damage done during the growing season. Historically, producers could only get about 27% of their losses returned. This is a major improvement compared to the previous payout rate of 55% that earned the program the nickname the “Not A Penny” program.
The basic 50 percent coverage (with 100 of value) will still only cost $250 to $1,875, but the farmer will have to pay an additional formula based premium in order to buy-up coverage to the 65 percent level (5.25 percent times the level of coverage). That premium will be capped at $6,562.50. NAP payments it will apply towards an individual or entity’s $125,000 NAP payment limit. This payment limit is separate from the payment limit for other FSA programs like ARC and PLC.
Additional changes in the 2014 Farm Bill specify that individuals or entities with average adjusted gross incomes above $900,000 are ineligible; and, that beginning, limited resource, and socially disadvantaged farmers qualify to have their service fee waived and premiums reduced by 50%.
Lastly, beginning with the 2015 crop year FSA has changed the production reporting requirements to avoid penalizing producers for years when they do not participate in NAP and do not report their production. Those producers will no longer receive an assigned yield or zero-credited yield in their actual production history (APH) for that year. Producers may also request replacement of assigned yields and zero-credited yields in their APH for the 1995 through 2014 crop years with the higher of 65 percent of the current crop year T-yield or the missing crop year’s actual yield.
Section 196 of the Federal Agriculture Improvement and Reform Act of 1996 permanently authorized the Noninsured Crop Disaster Insurance Program.
Last updated in June 2016.