About AGR-Lite

Adjusted Gross Revenue Lite (AGR-Lite) provides comprehensive protection against unavoidable natural disasters and price related causes of loss.

• Coverage is a revenue guarantee based on the lower of projected income for the insurance year or a five-year (5-year) average of allowable Schedule F income (including applicable adjustments) on a calendar or fiscal year basis.
• The basic AGR-Lite coverage available is the 65% coverage level at a 75% payment rate (65/75). Additional coverage levels and payment rates of 65/90, 75/75, 75/90, 80/75, and 80/90 are also available if additional eligibility and reporting requirements are met.
• Producers of one commodity can insure at 65/75, 65/90, 75/75, and 75/90. Producers with three or more qualifying commodities can insure up to 80/75 and 80/90. To qualify as three commodities, each must be projected to generate at least 11.1% of the gross revenue on the annual farm report. (Commodities with small revenue can be grouped to qualify.)

Revenue Guarantee

The revenue guarantee is calculated by multiplying the elected coverage level by the lower of the simple average of the AGR-Lite income history or the projected income for the insurance period as reported on the Annual Farm Report. AGR-Lite historical average income may be indexed upward for expanding operations if policy requirements are met.

Revenue to Count

Revenue to count will include:

• The sales of animals and other agricultural commodities purchased for resale, less the cost or other basis of such animals or other commodities. For example, apples were purchased for $400 and sold for $500, so revenue to count equals $100.
• The sale of animals, produce, grains, and other agricultural commodities raised.
• The taxable amount of total cooperative distributions.
• Commodity Credit Corporation loans reported under election; the taxable amount of Commodity Credit Corporation loans forfeited.
• Crop insurance proceeds.
• Other income, including income from bartering, payments from buyers of agricultural commodities for bypassed acreage, and diversion payments.
• The value of changes to commodity inventories and receivables (accrual adjustments).

Loss Payment

If a loss of revenue occurs due to an eligible, unavoidable peril which occurred during the insurance year, the loss payment is calculated by multiplying approved AGR-Lite (adjusted if allowable expenses fall below 70% of average allowable expenses) by the level of coverage selected, subtracting the revenue to count (including applicable accrual adjustments) and multiplying this result by the payment rate.

Units

The whole farm is considered the insurance unit.

Eligibility Requirements

To be eligible for AGR-Lite coverage, growers must:

1. Farm and derive income from agricultural commodities primarily within pilot counties.
2. Be a U.S. citizen/resident, permanently established in the U.S., and file specified tax forms if a corporation/partnership/trust.
3. Have filed a tax return (with supporting records) for each year (fiscal or calendar tax year) of AGR income and expense history (five (5) consecutive years).
4. Have revenue from commodities purchased for resale not exceeding 50% of the total.
5. Have liability of less than $1 million and expected allowable income from potatoes of less than 83.36% of the total expected allowable income for the insurance year.

Note: Growers are eligible for this program regardless of their income that is derived from animals or animal by-products (AGR limitation of 35% does not apply). Growers are not required to purchase a federally reinsured policy if 50% or more of the grower’s income is derived from crops eligible for other federally reinsured crop programs.

Application and Reports

An application and supporting documentation must be submitted on or before the March 15th sales closing date that includes:

1. Identification of the person applying for insurance
2. Coverage level elected
3. A farm report that includes:
   1. AGR-Lite income and expense history based on five (5) years of income tax records
   2. Copies of Schedule F tax forms for the five (5) years that were used to determine AGR-Lite history (upon request)
   3. An accounting of the allowable income expected to be received on a commodity basis for the covered insurance year
   4. Any changes in the ag commodities intended to be produced or changes in the size of the farming operation, share, market conditions, or any other changes that may reduce expected allowable income from previous levels
4. A report of beginning inventory

For the first year of AGR-Lite coverage at the 75% or 80% levels of coverage (with either payment rate), a producer must submit:

1. A commodity basis account of acres planted (or quantity produced for ag commodities other than crops)
2. The location of ag commodities
3. Production practices and marketing methods for each year of AGR history

How It Works

Projected income from the Annual Farm Report................................................	$130,000
5-year average of allowable Schedule F income...........................................	$150,000
5-year average of allowable Schedule F expenses......................................	$100,000
Coverage Level and Payment Rate Selected.................................................	65 / 75
Insurance Year Schedule F
Allowable Income............................................................................................	$ 70,000
Accrual Adjustment (value of change in inventory and receivables)......	$ 2,000
Allowable Expenses.......................................................................................	$ 68,000

Approved AGR-Lite (lower of projected income or 5-year average income)...	$130,000
Adjusted AGR-Lite {$130,000 X [1 - [0.70 - ($68,000/$100,000)]]} (expenses are less than 70% of average)..................................................................................	$127,400
Revenue Guarantee ($127,400 X 65%)..................................................................	$ 82,810
Revenue to Count .......................................................................................................	$ 25,000
Loss ($82,810 - $25,000) ..........................................................................................	$ 57,810
Loss Payment ($57,810 X 75%)...............................................................................	$ 43,358

Availability

State	Counties
Alabama	All counties
Alaska	All counties, except North Slope and Northwest Arctic
Arizona	All counties
Colorado	All counties
Connecticut	All counties
Delaware	All counties
Florida	All counties
Georgia	All counties
Hawaii	All counties, except Kalawao
Idaho	All counties
Illinois	All Counties
Kansas	All counties
Maine	All counties
Maryland	All counties, except Baltimore City
Massachusetts	All counties
Minnesota	All counties
Montana	All counties
Nevada	All counties, and the independent city of Carson City
New Hampshire	All counties
New Jersey	All counties, except Hudson
New Mexico	All counties
New York	All counties, except: Bronx, Hamilton, Kings, Nassau, New York, Otsego, Putnam, Queens, Richmond, Rockland, and Westchester
North Carolina	All counties
Oregon	All counties
Pennsylvania	All counties, except Philadelphia
Rhode Island	All counties
South Carolina	All counties
Tennessee	All counties
Utah	All counties
Vermont	All counties
Virginia	All counties, and the following independent cities: Alexandria, Bedford, Bristol, Buena Vista, Charlottesville, Chesapeake, Colonial Heights, Covington, Danville, Emporia, Fairfax, Falls Church, Franklin, Fredericksburg, Galax, Hampton, Harrisonburg, Hopewell, Lexington, Lynchburg, Manassas, Manassas Park, Martinsville, Newport News, Norfolk, Norton, Petersburg, Poquoson, Portsmouth, Radford, Richmond, Roanoke, Salem, Staunton, Suffolk, Virginia Beach, Waynesboro, Williamsburg, and Winchester
Washington	All counties
West Virginia	All counties
Wisconsin	All counties
Wyoming	All counties

Sales closing date is March 15th for both calendar year and fiscal year tax filers

Note: This summary is for general illustration only. See policy for program details.

04/10