Insurance Farming Terms Glossary

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Insurance Farming Terms & Definitions

Insurance Farming Terms Glossary

Insurance Farming Terms Glossary. Agents and insurers, as one of their goals, have to offer and maintain coverage for customers with special occupations. Farmers and ranchers certainly fall into that category.

The vocabulary of agricultural and agricultural policy includes many commonly used words and adds new meaning to them. This glossary of terms is designed to help clarify the special meanings of terms used in farming operations.

While this list includes many terms, the list is not comprehensive and complete because new words and phrases continue to become part of the agricultural policy vocabulary.

The irony is that, at one time, farm language was well-spread and widely known since so many households were farms. Today, family farms are uncommon, having been (largely) replaced by huge, commercial operations. Farming has become more specialized and increasingly sophisticated.

Efficient farm operations now call for in-depth knowledge about and use of cutting edge technology as well as MBA-level management expertise.

As an agent, underwriter, claims specialist or underwriting software programmer, it would be helpful to have a source of the more common terms, particularly about farm exposures and farm property. Any insight about a special type of property is always a good thing.

The Insurance Farming Terms Glossary should help you with some of the jargon and legal ease used in the insurance industry related to farming.

Read the Insurance Farming Terms Glossary to better understand farm and agribusiness insurance policy language and the special meanings of terms used in farming operations.

Insurance Farming Terms Glossary And Definitions

Following are farm terms and definitions used, alphabetically organized.

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z


ACP - See Agricultural Conservation Program.

acre -The basic unit of land measurement containing approximately 43,560 square feet. A square mile of land contains 640 acres.

acreage allotment - An individual farm's portion of the national acreage needed to produce an adequate supply for a designated crop.

Acreage Limitation Program - See Acreage Reduction Program.

Acreage Reduction Program (ARP) - When applicable for a given crop, it is a program that provides farmers with price support (and target prices) if their planted crops are below their base acreage.

acreage slippage - An acreage reduction program measurement that refers to a reduction in harvested acres being less than the increase in idled acres. The result is that a higher crop yield undermines a crop reduction target.

actual production history yield - When the information is available, it is the average yield experienced by a given farm parcel over a 4 - 10 year period. It is used for determining a guarantee under certain farm insurance policies.

advance payments - Payments made before final information is available to determine precise program benefits.

aged beef - Post-slaughter meat that has been stored at a given temperature and humidity for, generally, 10 to 28 days before it is processed.

agribusiness - Refers to large-scale (often corporate) farming operations involving the production, processing, and distribution of agricultural products and/or manufacturing agricultural equipment, machinery, and supplies.

agricultural adjustment - A generic term for any program designed to control agricultural production (and sometimes marketing).

Agricultural Conservation Program (ACP) - A subsidized program to financially assist farmers who agree to use a specific set of conservation practices.

agricultural policy - Describes any government program that influences farmer income (i.e., crop prices).

Agricultural Stabilization And Conservation Service (ASCS) - The U.S. Department of Agriculture agency that administers, primarily, the nation's farm price and income support programs.

Agricultural Trade and Development and Assistance Act - An Act intended to expand foreign markets for U.S. agricultural products and to assist economic development in poorer countries.

aquaculture - Refers to growing aquatic animals (fish, etc.) and/or plants in a controlled environment, such as cages, ponds or tanks.

allotment - See acreage allotment.

alternative crops - Crops (other than corn, soybeans or wheat) that may, potentially, provide additional farming income.

animal unit - A livestock measurement composed of a half-ton beef cow that has a dry matter forage of 26 pounds per day.

APH - See Actual Production History.

ARP - See Acreage Reduction Program.

ASCS - See Agricultural Stabilization And Conservation Service.


balance of trade - The positive or negative difference between the amount of exports and imports.

balance sheet of agriculture - An accounting statement that shows a farmer's total value of all owned property (including land), total debt and the net worth (difference between assets and debt).

barrow - A male pig that, when young, was castrated in order to produce an adult pig with edible meat.

base acreage - See farm acreage base and crop acreage base.

base period - The period used by the U.S. government in order to create indexes for commodity parity prices (1910-1914).

basic commodities - Traditionally refers to six crops for which the U.S. government created produce support programs - corn, cotton, peanuts, rice, tobacco, and wheat.

basic loan rate - A loan rate for certain crops that was originally established by the Food Security Act of 1985. The minimum rate may be lowered (by up to 20%) by the Secretary of Agriculture.

Beef Promotion And Research Act - Established as part of the Food Security Act, it includes a check-off and promotion program for beef.

bilateral trade agreement - A trade agreement between two nations.

biotechnology - Using plant cells, animal cells or parts of cells (microorganisms) to perform processes or to make produce products.

buffer zone - A narrow stretch of land used to separate different uses of land.

blended credit - A financing plan that assists foreign buyers in order to encourage exports. It refers to combining government loan rate supports with regular commercial credit to create lower interest rates.

bovine growth hormone - See bovine somatotropin.

bovine somatotropin - A hormone produced in cows that, when injected to increase their level of this compound, significantly increases milk production.

breed - As a verb, refers to controlling an animal's reproduction, including mating and mating partner. As a noun, refers to a given type of cattle, goat, horses, or sheep) that have certain characteristics and which are carefully controlled in order to preserve said characteristics.

BST - See bovine somatotropin.

buffer stocks - Supplies of a product in storage controlled by a government that is used to affect supply in order to stabilize market costs.

bushel lease - A rent payment to a landowner that consists of a specific number of bushels of grain.

buy-up coverage - A layer of crop insurance coverage above any available catastrophic coverage.


CAP - See Common Agricultural Policy.

capital gain - That portion of a sales price for goods that exceeds the seller's purchase price (net of expenses).

carcass merit - Those qualities reflecting a carcass that produces a high percentage of red meat that is desirable in palatability. Two measures are generally used to predict merit. Red-meat percent, which is predicted by USDA yield grade, and palatability, which is predicted by USDA quality grade (focusing on level of marbling). Yield grade is highly accurate for its purpose. Quality grade is not.

cargo preference - A requirement stating that a designated portion of exported goods or commodities be transported in American ships.

carrying capacity - The maximum (either weight or number) of livestock that can be properly and indefinitely handled by a given amount of grazing land.

carryover - A farm crop that has not been used at the end of a marketing year and is typically stored or used the next marketing year.

cartel - A group of businesses operating in the same area (field) that join forces in order to create a monopoly (control production, marketing and, therefore, prices/profits).

cash flow - Farm-generated funds (via crop harvest and livestock sales) that are used to cover operation expenses and investments.

CCC - See Commodity Credit Corporation.

CCC Grain - Any grain that is owned or controlled (under a loan or credit agreement) by the Commodity Credit Corporation.

cereal grains - Refers to grains, such as rice and wheat, which are meant for human consumption.

Chapter 12 - A type of financial reorganization (bankruptcy) designed to help distressed family farmers.

check-off - A portion of money deducted from a crop/product sale that is designated for promoting sales and research for that crop/product.

clutch - A hen's egg-laying cycle.

coalition - Entities who join forces in order to affect a governmental decision (typically legislation).

coarse grains -Grains (barley, corn, oats, etc.) typically used as livestock or poultry feed.

commodities - In agriculture, refers to widely traded products such as corn, soy beans and wheat.

Commodities Futures Trading Commission (CFTC) - Federal agency that regulates the nation's futures contract markets.

Commodity Credit Corporation - A government corporation that borrows from the U.S. Treasury to operate the U.S. Department of Agriculture's various support programs. The organization also manages the nation's buffer (market stabilization) stocks.

commodity options - Refers to options (rights) to buy or sell contracts of certain commodities (including cattle and hogs) at designated prices.

commodity programs - Price support programs involving coarse grains, cereal grains, dairy products, cotton, peanuts, tobacco, and sugar.

Common Agricultural Policy (CAP) - The agricultural policy of the European Economic Community.

common market - See European Economic Community.

compaction - Soil that is compressed and devoid of air spaces, typically due to the action of heavy machinery.

comparative advantage - Simply speaking, this is the concept of modern trade. An entity that creates or grows and sells goods or products that it can efficiently (low cost) produce and buys goods and products that it can't efficiently grow or make.

concessional sales - Refers to a commodity buyer who receives credit payment terms that are superior (lower) than what is available on the open market.

conservation compliance - Refers to a portion of the Food Security Act of 1985. By 1995, farms that were suffering from a high level of erosion were to have completed an approved conservation plan or become ineligible for any future farm programs.

conservation reserve - Land that has been, temporarily, rotated out of crop use and planted with grasses (or even trees) as a soil conservation method. A farmer is paid for each year such cropland is conserved.

conservation use - See conservation reserve.

considered planted - A determination that land which is not planted with a program crop, is still considered as such for purposes of determining a farm's base acreage. Circumstances for granting "considered" status include acreage in a conservation program, land that could not be planted because of a natural catastrophe or per the decision of the Secretary of Agriculture.

consumer subsidy equivalents - An estimate of the subsidies that consumers would need if the benefits of all agricultural farm programs were eliminated.

contemporary group - Cattle raised under the same set of conditions and the same gender and age.

converted wetlands - Wetlands that have been drained in order to create new farm land.

cooperative - A form of business owned by the entity's customers, such as farm supplies and services operations.

corporate farm - A farm operation that has been legally incorporated and its stock is typically closely held.

cost-of-production - The average dollar amount necessary to grow or raise a unit (i.e., bushel, pound, ton, etc.) of farm product.

cost sharing - Refers to a conservation program in which the government shares its cost with a farmer.

cover crop - Typically, a grass crop that is grown to conserve or enhance soil that will later be used for a regular crop. Cover crops are also used in other situations, such as orchards.

crop acreage base - The average number of program crop acres planted (or considered planted) for harvest. The average is calculated over the most recent five-year period.

crop insurance - A government subsidized program that allows farmers to buy protection against crop losses due to certain types of loss (typically weather-related).

crop year - The year that a crop is harvested and sold.

cross-breeding - The practice of mating two different animal breeds.

cross compliance - A requirement that in order to qualify for one crop price support program, a farmer must also meet the requirements of, at least one other program.


Dairy Price Support Program - Originally established in 1949, this government program establishes a minimum market price for milk that is supported by federal government purchases of milk, cheese and other diary products.

decoupling - The process of separating acreage reduction requirements from program payments where the farmer would receive, gradually, smaller payments while acquiring freedom to plant more of the crops he/she desires.

deficiency payments - Refers to Federal government payments to farmers that close the gap between a target farm price and the below-target prices received from the market. The target v. market price can be determined by several methods, depending upon the crop or commodity involved and/or the Secretary of Agriculture's discretion.

Delaney Clause - An amendment to the Federal Food, Drug, and Cosmetic Act from the late 50s. It bans using food additives that testing has proven to be cancer risks.

disaster payments - Refers to payments farmers receive from the federal government under two circumstances. One occurs when circumstances prevent a farmer from planting crops. The other is when a farmer experiences unusually low yields. The payments apply in areas where crop coverage is not available.

diversion payment - Payments made to induce land owners to use acreage for conservation rather than farm use.

diverted acres - Refers to acreage that is converted from active farming to soil conservation uses.

double crop - Describes the practice of planting a second crop after harvesting a different, initial crop.


economic emergency disaster payments - Refers to instances when a disaster substantially reduces production of feed and cereal grain farmers and the reduction qualifies for economic emergency disaster payments.

eligible producer - Farmers who sign an agreement to follow a prescribed set of practices in exchange for government farm program benefits.

embargo - When one (or more) country's government legally bars trade with another country. Such actions may either be total or partial.

Emergency Feed Assistance Program - A program that allows livestock producers who are suffering from a weather-induced feed harvest reduction to buy CCC grain at 75 percent of the basic county loan rate.

emergency loans - A generic reference to any lending to farmers who are suffering from natural disasters.

equity - With regards to farming, refers to the net value (total assets minus all debts) of an individual farm.

established price - A price set by the federal government for certain crops which acts as a minimum or floor price. It is paid when, for various reasons, a market price for a crop plummets.

ethanol - Alcohol derived from plants (typically corn) which is then combined with gasoline to form gasohol.

exchange rate - The number of units that one country's currency may be exchanged for one unit of another country's currency. Exchange rates constantly change.

export certificates - Documents that list an amount and type of grain that will be exported. If a certificate holder can prove that the export has occurred, the certificate may be redeemed for cash.

Export Credit Guarantee Program - A federal program that protects short-term credit lenders by guaranteeing repayment (for a maximum of three years).

Export Enhancement Program - Where exporters are provided certificates that are redeemable for CCC-owned commodities which allows them to sell certain commodities to certain countries at below (U. S. market) prices.

Export PIK - See Export Enhancement Program.

exports - Services and/or products that are sold to markets outside of the producer's domestic market.

export sales reporting - The USDA requires, minimally, weekly reports of commodity sales (but transactions involving the export of more than 100,000 metric tons of major grains and oilseeds must be reported within 24 hours of the sale).

export subsidy - Government grants to domestic exporters to encourage (facilitate) sales to foreign markets.

extension agency - A department or outreach division of a university that focuses on agriculture. The extension helps its surrounding community by offering education and research.

extensive ranching - A ranching procedure where a large area of land is managed with a very low investment of financial and human resources.


fallow - Farm land that, after it is plowed, is not further processed for use.

family farm - A farm operation where most of the labor, capital and operating decisions are supplied by a family. A family must also have some level of ownership interest in the land being farmed.

farm acreage base - The total of crop acreage bases that are contained on a given farm (includes average acres planted to soybeans and/or reserved for conservation).

Farm Credit Administration - The federal government agency that supervises the nation's 12 farm credit system districts.

farm credit system - The system composed of various, farmer-owned institutions that have a primary role in providing farm credit, such as coop(eratives) banks, federal land banks, federal intermediate credit banks, and production credit associations.

farm management - A general reference to processes and resources (financial and natural) involved with efficient and profitable farm operations.

farm marketing quota - See marketing quota.

farm program payment yield - See program yield.

Farmer-Owned Reserve (FOR) - A federal grain reserve program. It consists of wheat and feed grains that are, via the CCC, loaned to the CCC from three to five years. The reserve is used as a buffer stock. Farmers who have lent grain may remove and sell their grain once a release price (specific market price) is reached. Farmers may remove grains during times that the release price has not been met, but the removal is then subject to a penalty. The loans granted to farmers are done on a non-recourse basis. Such lenders may also receive loan interest waivers as well as annual storage payments.

Farmers Home Administration - The USDA agency that is empowered to make loans to farmers who don't qualify for loans from private sources.

federal crop insurance - This program (optionally available to farmers since the 1930s) was revised under the Agricultural Risk Protection Act of 2000. Under the program, the federal government heavily subsidizes the premium paid for insuring certain crops. The amount of the subsidy depends upon the level and type of coverage a farmer selects. The subsidy percentage is reduced at higher coverage levels.

Federal Insecticide, Fungicide, And Rodenticide Act - The act which regulates the sale and labeling of many agricultural pesticides.

Federal Land Bank - See farm credit system.

federal marketing orders and agreements - See marketing orders and agreements.

feed grains - See coarse grains.

feed lot - A facility where smaller animals are kept confined and, with intensive feeding, are fattened up to prepare them for sale.

FIFRA - See Federal Insecticide, Fungicide, And Rodenticide Act.

Fifty-Ninety-Two (50-92) - Under this program, farmers who plant 50% or more of their available acreage may qualify (under certain circumstances) for receiving 92 percent of their deficiency payments.

Findley Provision - A Food Security Act provision that permits the Secretary of Agriculture discretion to reduce crop loan rates below the basic loan rate. A reduction (up to 20%) may be made if the average market price in the previous marketing year was not more than 110 percent of the loan rate for that year. Reductions may also be made in order to re-establish a competitive market.

Findley payments - Deficiency payments generated by a farmer's qualification under the Findley provision.

FmHA - See Farmers Home Administration.

food grains - Cereal grains such as rice, rye and wheat.

Food Security Act Of 1985 - Legislation that replaced the Agriculture and Food Act of 1981.

Food Security Improvements Act Of 1986 - A set of enhancements to the Food Security Act of 1985 that involved use of diverted acreage, program payment yield rules, under planting, export subsidies and other issues.

F.O.R - See farmer owned reserve.

forage - Plants used for food by either wild or domestic animals.

free market - An economic environment where prices are set by rules of supply and demand.

free trade - A theory of international trade without government influences such as embargoes, quotas, subsidies or taxes/tariffs.

futures contract - An agreement that binds a party, at an established point in the future, to either sell or buy an amount of a commodity at a given price. It is a hedging tool.


GAO - See General Accounting Office.

GATT - See General Agreement On Tariffs And Trade.

General Accounting Office - A federal agency that reports to Congress. It investigates the use of fund appropriations by various government programs.

General Agreement On Tariffs And Trade (GATT) - An international agreement that was created after World War II. The agreement provides guidance on international trade, including acting as a body to assist in trade disputes.

generic certificates - Certificates are sometimes used as payment under a given farm program. In various circumstances, they can be redeemed for cash or act as a cash substitute to purchase commodities (or to pay back commodity loans).

genetic engineering - Essentially, a process of developing new plants and animals through manipulating genes.

GIPSA - See Grain Inspection, Packers and Stockyards Administration.

grain elevator - A commercial facility used to store grains.

Grain Inspection, Packers and Stockyards Administration - A federal agency authorized to performed grain inspections and which upholds standards established by the U.S. Grain Standards Act.

grain standards - Refers either to accepted agricultural industry or GIPSA required levels of condition for applicable grain crop.

grange - A social support organization of farmers.

guaranteed loan - A loan that a government is obligated to repay in the event that a farm borrower defaults, including backing export loans in order to encourage exporting.


handling only - Refers to grain a party receives only for the purpose of continuing the process of its shipment. No storage is involved.

hatchery - A facility that hatches eggs and sells the chicks to farmers.

highly erodible cropland - A cropland that, while in use, qualifies as land capability class four or six through eight by the Soil Conservation Service.

hock - Usually refers to the rear leg of cattle.

Homestead Protection - The Food Security Act (1985) provision that allows the former resident of a farm that's undergone foreclosure to continue to live on the property.

humus - The nutrient-rich portion of soil created by decomposed plants and animals.

hybrid - A plant or animal that results from a combination of two different species/varieties.


import barriers - Any device, such as embargoes, quotas and tariffs, that is intended to restrict the inflow or certain goods or services from other countries.

import quota - A maximum volume (or value) of a commodity that a country permits to enter its borders in a specified amount of time.

imports - Products and services that are purchased from countries outside a domestic market.

indemnity programs - Programs that make loss payments made to farmers that suffer loss due to specified causes (such as pesticides or toxic substances).

industrial agriculture - Taking advantage of subsidized resources (such as fertilizers and fuels) to produce food and/or feed.

integrated pest management - Control pests by combining certain crop production methods with pest monitoring.

international trade barriers - Government regulations that restrict import/export activities for specified foreign markets.

intensive grazing - Rotating livestock between different pastures in order to minimize overgrazing.

IPM - See Integrated Pest Management.


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kid - A young goat.


light stocking - Grazing pastureland at a level substantially lower than its maximum capacity.

LISA - See Low Input Sustainable Agriculture.

loan deficiency payment - Net difference between the interest rate originally charged for a marketing loan and the loan repayment rate.

loan forfeiture - Surrendering commodities pledged for a loan rather than repaying the loan.

loan rate - The government's per unit (bushel, bale, pound) price for making loans to farmers to support crop sales.

low input ranching - See extensive ranching.

low input sustainable agriculture - Reducing the level amount of cash inputs (such as fertilizers and chemicals) and using more effective crop and rotation practices to create an efficient and profitable agricultural system.


mandatory program - A farm program that demands participation from all farmers.

Market-Oriented Farm Policy - A government policy that permits prices to be set on the open market.

market price - The current price that is received or paid for a unit of a given commodity.

Marketing Board - A government-created board a country typically uses to handle a particular commodity's export.

marketing certificates - Agriculture Department certificates that, depending upon the applicable program, may be redeemed for cash or commodities.

marketing loan - A loan that is repayable at a rate level that is less than the loan origination rate.

Marketing Orders And Agreements - Federal government programs that are requested by a majority of producers of a given crop or commodity. The program, ideally, allows the producers to create and maintain an orderly market. Typically, a program uses controls on packaging, shipment amounts, or other elements in order to restrict the market.

marketing quota - Issued as part of a marketing order, it is the maximum amount of a crop acreage or production allowed to an individual producer so that, aggregately, a national, normal market will be achieved. Usually, producers that exceed their individual quota are subject to a penalty.

marketing spread - The difference between the price paid to a producer and charged to a consumer for the same amount of the same product.

marketing year - The annual period beginning at the start of a given crop's harvest, such as July 1 - June 30. Naturally, marketing years differ for various crops.

milk assessments - Dairy farmer milk check deductions that are used to pay for special federal government supply reduction programs.

Milk Marketing Orders - The collective programs used to control the marketing and minimum prices for fluid milk produced and consumed in the United States.

Milk Production Termination Program - A Food Security Act program where the Agriculture Dept. paid dairy farmers to quit producing milk for a five year period.

monoculture - Repeatedly planting the same crop in a field without rotating it for other use.

multilateral agreement - An international agreement involving at least three countries.


NAP - See Non-Insured Crop Disaster Assistance Program.

national farm program acreage - An estimate of the total number of harvested acres of a crop necessary to meet applicable objectives (domestic use, export goals and supply changes).

national weighted average market price - The average, national price paid to producers for a given commodity at a given time.

Natural Resources Conservation Service - The federal agency that leads the U.S. natural resources and environmental conservation efforts.

negotiable marketing certificates - A form of marketing certificate that is readily exchanged for cash or commodities.

no net cost programs - Price support programs that use producer assessments in order to pay for that program, resulting in no cost to the government.

Non-Insured Crop Disaster Assistance Program - A form of financial assistance for farmers who suffer a certain level of production loss that does not qualify for insurance coverage.

nonrecourse loans - Price support loans that allow farmers to hold their crops for later sale. The loans bear no danger of default (recourse) since the farmer may either repay the loan with interest or surrender the applicable crop harvest as a loan pay-off.

nontariff trade barrier - Any non-tariff method that a government uses to restrict the flow of imports/exports.

normal crop acreage - Farm acreage normally used for a given crop.

normal production - The result of multiplying a farm or area's normal acreage (per a given commodity) by its normal yield.

normal yield - The average yield (per acre) established for a particular farm or area.

NRCS - See Natural Resources Conservation Service.


offsetting compliance - See cross compliance.

offal - The inedible parts of a butchered animal removed in dressing it.

oilseed crops - All crops produced with the objective of extracting oil from their seeds. Oilseed crops include castor beans, cottonseed, flaxseed, peanuts, safflower, sesame, sunflower and soybeans.

organic farming - Farming methods that avoid using any inorganic agricultural chemicals and herbicides.


paid diversion program - Where farmers receive direct payments to divert a specified amount of certain crop acreage into conservation.

parity - A defined level of farmer purchasing power in relationship to an earlier (base) period.

parity index - The index of prices paid by farmers for items used in production, interest, taxes and wage rates. Each month the U.S. Department of Agriculture issues the current index along with the index of prices received by farmers, parity prices on individual commodities, and the parity ratio.

parity price - A commodity price that would result in the same purchasing power it had in the base period (1910-1914).

parity ratio - A measurement of prices received by farmers for production to prices paid by farmers to create their production. The amounts are based on indexes maintained by the U.S. Department of Agriculture.

payment-in-kind - Any program where a farmer is paid in the form of a commodity in return for various reasons (such as diverting acreage into conservation).

payment limitation - The maximum (annual) amount that may be paid to an individual farmer under the cotton, feed grains, rice and wheat programs.

permitted acreage - Acreage a farmer may plant of a program crop after that farmer has made any acreage reduction required by the applicable program.

PIK And Roll - Refers to redeeming federal crop loans with payment in kind (PIK) certificates.

PIK Certificates - See payment in kind certificates.

pipeline stocks - The minimum amount of any product necessary to support its normal market.

porcine somatotropin - A growth hormone that, when injected into swine, increases muscle weight with less fat and boosts feed efficiency.

pork bellies - Meat (such as bacon) from the belly area of a pig.

Pork Promotion, Research, And Consumer Information Act - A provision of the Food Security Act regarding pork industry research and promotion.

posted county price - The price used for redeeming a crop loan with PIK certificates.

pullet - A young (less than 1 year old) female chicken.

precision farming - The use of global positioning (GPS) technology and ground sensors to determine fertilizer application, deploy chemicals and to predict crop yields.

pre-potent - Refers to an animal's ability to pass along its traits to subsequent generations.

prevented planting - Where planting is stalled or stopped due to poor (usually disastrous) weather conditions.

price supports - Government strategies, including below market loans, commodity purchases and direct payments, intended to establish a minimum price for a targeted crop or product.

producer assessments - Charges made to commodity producers to pay the costs of a price support program for that commodity (such as milk or tobacco).

producer subsidy equivalents - The amount of a subsidy needed to compensate producers for the loss of a given government support program.

production control programs - Refers to various government programs that have been or are used to reduce a given commodity's production.

Production Credit Association - See farm credit system.

program benefits - Any perk or reward associated with agreeing to participate in a given government farm program.

program commodities - Crops (including barley, corn, cotton, grain sorghum, honey, milk, mohair, oats, peanuts, rice, rye, soybeans, sugar, tobacco wheat, and wool) for which government support programs exist.

program yield - An individual farm's traditional crop yield that is used to calculate deficiency payments.

protectionism - Import controls (such as quotas) used by governments in an attempt to protect its domestic producers.

proven yield - Proof (documentation) of yields amounts that are accepted by local Agricultural Stabilization And Conservation Service (ASCS) offices.

PST - See porcine somatotropin.

Public Law 480 (P.L. 480) - See Agricultural Trade and Development and Assistance Act.


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rangeland - Land that is normally used for grazing animals rather than for growing crops.

recourse loan - Any farm loan that must be repaid in cash.

Reduced Acreage Program - See acreage reduction program.

referendum - Refers to a group of commodity producers when approving (voting for) a proposed program would require the participation of all of that group's members.

release price - The price that, if paid, will result in a penalty-free release of a farmer's grain from storage in a reserve.

rendering plant - A facility that extracts oil, lard and tallow from animal parts.

reserve premiums - Where producers who have stored their grain in a reserve have been permitted to add a bonus value to their loan rates (usually on a cents per unit basis).

restitution - European term for an export subsidy.

rotational grazing - The practice of moving livestock from one feeding site to another in an established pattern.


set-aside - A requirement for a farmer to switch (divert) some amount of his acreage to conservation use in order to participate in a given farm program.

silage - A mixture of corn, sorghum, grass and/or other materials that are used as wintertime livestock feed.

size neutral - A policy or program with an overall affect of maintaining the status quo (size) of all farm operations.

sod buster bills - Legislation that promoted the retention of rangeland by providing program benefits to farmers who did not plow such land for planting.

soil bank - A 1950s program where farmers signed contracts to place certain amounts of acreage into conservation for specified periods of time.

standing rent - See bushel lease.

stocks - See carryover.

storage payment - Payments to farmers for placing commodities into a reserve, but storing them elsewhere (their own storage area or with a commercial facility).

structure of agriculture - Refers to the composition of the country's agricultural industry, particularly statistics regarding the number, sizes and types of farming operations.

supplementary payments - A type of deficiency payment made to certain natural fabric producers (extra-long staple cotton, mohair and wool).

supply management - Any program or policy intended to support a commodity's price-level by influencing its supply.

swampbuster bills - Legislation that prohibits cropland creation via draining natural wetlands.


tame pasture - Land that has been planted with species that are not native to that land.

target price - See established price.

targeted export assistance - Using subsidies to promote exports to specific countries.

targeting - Directing program benefits toward smaller or medium size farms.

tariffs - Government taxation on imported commodities. They may be on either a fixed or percentage basis.

tax loss farming - Deliberately conducting farming operations at a tax loss in order to reduce the tax liability on other, non-farm operations.

TEA - See Targeted Export Assistance.

tenancy - A rented or leased farm operation.

tenant protection - Refers to farm program benefits that permit farm tenants to receive them along with landowners.

tenure - A farmer's land ownership status (owner, part-owner, or tenant).

tiering - See targeting.

total mixed ration - A feed combination of hay, corn, barley, field grasses, cotton seed, and bakery or grocery byproducts.

total stocks - A nation's total supply of stock including government-controlled and privately held stocks.

trigger price - Where a commodity's market price first meets that commodity's reserve release price.

triple base plan - A plan that offsets a farm program expense by making deficiency payments on a program's permitted acreage and allowing the farmer complete freedom on what to plant on the non-program acreage.

two-price plan - A plan that supports domestically used crop production, while permitting the free market to control whatever price applicable to that crop's export.


UGRSA - See Uniform Grain and Rice Storage Agreement.

Uniform Grain and Rice Storage Agreement - A contract between the Commodity Credit Corporation (CCC) and a grain storage entity, allowing the latter to store grains that are owned or controlled by the CCC.

U.S. Trade Representative - The cabinet position which leads the Office of the U.S. Trade Representative who is responsible for U.S. trade policy.


value-added tax - Any tax that is assessed at each stage of production.


whole herd buyout - See Milk Production Termination Program.


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Zero-92 (0-92) - A crop reduction (supply control) program that applies to wheat and other feed grain crops. A farmer who agrees not to plant any of his available acreage can receive 92% of his deficiency payment.

Insurance Farming Terms Glossary - The Bottom Line

We hope that the Insurance Farming Terms Glossary helps you to better understand the many legal terms used in and around agribusiness and farm insurance policies.

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