AGR-L Coverage Level Eligibility - Exhibit 123-1

June 28, 2007

Exhibit 123-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE LITE (AGR-L)
COVERAGE LEVEL ELIGIBILITY
Edit Description

Adjusted Gross Revenue Lite (AGR-L)
(Insurance Plan Codes 61)
Note: Grouping of commodities for coverage level eligibility does not apply to
AGR (plan 63).
COVERAGE LEVEL ELIGIBILITY
To qualify for coverage level and payment rate combination the following number of commodities are required
according to Underwriting Rules:
Coverage
Level
Percentage
65
75
80

Payment
Minimum Number of
Rate
Agricultural Commodities
Percentage Produced
75 or 90
1
75 or 90
1
75 or 90
3

Revenue from commodities that do not qualify (i.e. do not have the level of required revenue to count) as a
commodity for coverage level purposes will be grouped together to determine if the farm is eligible for the 80
percent coverage level choice. Each commodity will be used only once for coverage level eligibility and revenue
above the revenue requirement for coverage level eligibility will not be applied towards qualifying additional
commodity(s).
Example 1:
Commodity 1 $50,000
Commodity 2 $35,000
Commodity 3 $5,000
Commodity 4 $5,000

Qualifies
Qualifies
Add commodity 3 and 4 revenue and
qualifies as an additional commodity

Calculation is:
1/4 Commodities * .333 = .083
.083 * $95,000 Approved Gross Revenue (AGR) = $7,885 to qualify as a commodity.
With addition of revenue from commodity 3 and 4, this grower has 3 commodities and qualifies for all
coverage levels.

FCIC-APPENDIX III

123-1 - 1

RY 2008

June 28, 2007

Exhibit 123-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE LITE (AGR-L)
COVERAGE LEVEL ELIGIBILITY
Edit Description

Example 2:
The following example provides additional information as to how eDAS will handle the validation of coverage level
eligibility.
Minimum Qualifying Amount (MQA) = $2,000
Commodity 1 $1,800
Commodity 2 $2,200
Commodity 3 $500
Commodity 4 $750
Commodity 5 $5,000
Commodity 6 $250
Commodity 7 $100
Commodity 8 $1,900
Commodity 9 $1,500
Commodity 10 $1,000

Qualifies

Qualifies

Step 1 – Find all the commodity values >= MQA. These include commodity value 2 and 5, 2 commodity values that
qualify.
Step 2 – Calculate amounts by adding each commodity value to every other commodity value. For example,
commodity values 1 + 3 = $2,300, 1 + 4 = $2,550, 1 + 6 = $2,050, 1 + 7 = $1,900, 1 + 8 = $3,700, 1 + 9 = $3,300,
and 1 + 10 = $2,800. Then, commodity values 3 + 4 = $1,250, 3 + 6 = $750, 3 + 7 = $600, 3 + 8 = $2,400, 3 + 9 =
$2,000, and 3 + 10 = $1,500. Then, commodity values 4 + 6 = $1,000, etc. Commodity values 2 and 5 qualified in
the first step so they should be excluded. Select the combinations that are >= the MQA but closest to the MQA
without using any commodity value twice.
Step 3 – Repeat step 2 but use 3 combinations, 4 combinations, 5 combinations, etc.
Note:

eDAS will stop at the point when three qualifying commodities have been identified or the maximum
number of commodities from the individual farm have been used.

FCIC-APPENDIX III

123-1 - 2

RY 2008