Understanding Crop of Economic Significance in Agricultural Law
Definition & Meaning
A crop of economic significance is defined as a crop that contributes, or is expected to contribute, ten percent or more of the total expected value of a producer's share of all crops grown in a specific county during the current or previous crop year. However, if the expected liability for the crop under the Catastrophic Risk Protection Endorsement is equal to or less than the required administrative fee for that crop, it will not be classified as a crop of economic significance.
Legal Use & context
This term is primarily used in the context of agricultural law and federal crop insurance. It helps determine eligibility for various insurance programs administered by the Federal Crop Insurance Corporation. Understanding whether a crop qualifies as economically significant can impact producers' decisions regarding insurance coverage and risk management strategies. Users may find relevant forms and templates on platforms like US Legal Forms to assist with insurance applications and other legal documents related to agriculture.
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A farmer in County A grows corn, soybeans, and wheat. Last year, the total expected value of their crops was $100,000. If corn alone is expected to contribute $15,000 this year, it qualifies as a crop of economic significance. However, if the expected liability for corn under the Catastrophic Risk Protection Endorsement is $300, which is less than the administrative fee of $400, corn would not be considered a crop of economic significance.