Coverages | Adjusted Gross Revenue (AGR)

About AGR

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

• Coverage is expressed as a revenue guarantee and is 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 coverage available to all AGR policyholders 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.

Revenue Guarantee

The revenue guarantee is calculated by multiplying the elected coverage level by the lower of the simple average of the AGR income history or the projected income for the insurance period as reported on the Annual Farm Report. AGR 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 (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 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.
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. Not have more than 50% of allowable income for the insurance year derived from agricultural commodities purchased for resale.
5. Not have more than 50% of allowable income for the insurance year derived from a combination of production of insurable crops, animals, and animal products unless such commodities are insured under other available insurance offered under authority of Federal Crop Insurance Act.
6. Not have more than 35% of allowable income for the insurance year derived from animals and animal products.
7. Not have liability of more than $6.5 million and revenue from potatoes of more than 83.35%.

How It Works

Projected income from the Annual Farm Report.............................................	$270,000
Five-year (5-year) average of allowable Schedule F income....................	$250,000
Five-year (5-year) average of allowable Schedule F expenses................	$190,000
Coverage Level and Payment Rate Selected..............................................	80/75
Insurance Year Schedule F
Allowable Income.........................................................................................	$130,000
Accrual Adjustment (value of change in inventory and receivables)..	$2,000
Allowable Expenses....................................................................................	$130,000
Approved AGR (lower of projected income or 5-year average income)......	$250,000
Adjusted AGR {$250,000 X [1 - [0.70 - ($130,000/$190,000)]]} (expenses are less than 70% of average)............................................................................	$245,000
Revenue Guarantee ($245,000 X 80%)............................................................	$196,000
Revenue to Count ($130,000 + $2,000)............................................................	$132,000
Loss..........................................................................................................................	$64,000
Loss Payment ($64,000 X 75%).........................................................................	$48,000

Application and Reports

An application and supporting documentation must be submitted on or before the 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 income and expense history.
   2. Copies of Schedule F tax forms for the five (5) years that were used to determine AGR history.
   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.

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

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

Availability

State	County Availability
California	Fresno, Kern, Riverside, San Diego, San Joaquin, San Luis Obispo, Tulare, and Ventura
Connecticut	All counties
Delaware	All counties
Florida	Alachua, Gilchrist, Levy, Marion, Sumter, and Suwannee
Idaho	Canyon, Payette, and Washington
Maine	All counties
Maryland	Anne Arundel, Baltimore, Baltimore City, Calvert, Caroline, Carroll, Cecil, Charles, Dorchester, Frederick, Harford, Howard, Kent, Montgomery, Prince George’s, Queen Anne’s, St. Mary’s, Somerset, Talbot, Wicomico, and Worcester
Massachusetts	All counties
Michigan	Allegan, Berrien, Kent, Mason, Muskegon, Newaygo, Oceana, Ottawa, and Van Buren
New Hampshire	All counties
New Jersey	All counties
New York	Cayuga, Chautauqua, Erie, Genesee, Monroe, Niagara, Onondaga, Ontario, Orange, Orleans, Oswego, Seneca, Suffolk, Ulster, Wayne, and Yates
Oregon	Benton, Clackamas, Columbia, Lane, Linn, Malheur, Marion, Multnomah, Polk, Washington, and Yamhill
Pennsylvania	Berks, Carbon, Columbia, Crawford, Erie, Fayette, Lackawanna, Lancaster, Lehigh, Monroe, Northampton, Schuylkill, Westmoreland, and York
Rhode Island	All counties
Vermont	All counties
Virginia	Accomack, Caroline, Charles City, Chesterfield, Essex, Gloucester, Hanover, Henrico, Isle of Wight, James City, King and Queen, King George, King William, Lancaster, Mathews, Middlesex, New Kent, Northampton, Northumberland, Prince George, Richmond, Southampton, Surry, Sussex, Westmoreland, and York counties, and the following independent cities: Chesapeake, Colonial Heights, Franklin, Hampton, Hopewell, Newport News, Norfolk, Petersburg, Poquoson, Portsmouth, Richmond, Suffolk, Virginia Beach, and Williamsburg
Washington	Adams, Benton, Chelan, Douglas, Franklin, Grant, Kittitas, Klickitat, Okanogan, Walla Walla, and Yakima

Sales closing date is January 31 for both calendar year and fiscal year tax filers.

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

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