AGR & AGR-L Liability - Premium Calculations - Exhibits 151-1

June 28, 2007

Exhibit 151-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE (AGR)/LITE (AGR-L)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Adjusted Gross Revenue (AGR)/Lite (AGR-L)
(Insurance Plan Codes 63 & 61)
LIABILITY CALCULATION
LIABILITY = APPROVED_AGR * COVERAGE LEVEL * PAYMENT_RATE
(field 34)
(field 32)
(Internal)
(field 25)
Note: Liability Cap, cannot exceed $6.5 million for AGR and $1 million for AGR-L

PREMIUM LIABILITY CALCULATION
MAX MPCI = LIABILITY * 0.50
(Internal)
(field 34)
PREMIUM LIABILITY = LIABILITY - Lesser of: (MPCI_LIABILITY or MAX MPCI)
(Internal)
(field 34)
(field 33)
(Internal)

TOTAL PREMIUM
TOTAL_PREMIUM = PREMIUM LIABILITY * AGR_RATE
(field 38)
(Internal)
(field 37)

PRODUCER PREMIUM
SUBSIDY = TOTAL_PREMIUM
(field 39)
(field 38)

* SUBSIDY FACTOR
(Internal)

PRODUCER_PREMIUM = TOTAL_PREMIUM - SUBSIDY
(field 44)
(field 38)
(field 39)

FCIC-APPENDIX III

151-1 - 1

RY 2008

June 28, 2007

Exhibit 151-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE (AGR)/LITE (AGR-L)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

DIVERSIFICATION FACTOR (DF) FORMULAS:
CASES

FORMULA

1 Commodity

DF = 1.000

2 Commodities

DF = .668 + .0179999 (DEV) + .3142858 (DEV) (DEV)

3 Commodities

DF = .523 + .0607623 (DEV) + .2229 (DEV) (DEV)

4 Commodities

DF = .474 + ..0248208 (DEV) + .218472 (DEV) (DEV)

5 Commodities

DF = .437 + .0710358 (DEV) + .1760129 (DEV) (DEV)

6 Commodities

DF = .412 + .0325131 (DEV) + .1945816 (DEV) (DEV)

7 Commodities or more

DF = .410

TOTAL WEIGHTED FARM RATE
% of REVENUE = COMMODITY_VALUE / TOT_EXPECT_INCOME
(Internal)
(field 59)
(field 28)
WEIGHTED COMMODITY RATE = COMMODITY RATE * % of REVENUE
(Internal)
(Internal)
(Internal)
TOTAL_WEIGHT_RATE = Sum of WEIGHTED COMMODITY RATE
(field 35)

DIVERSITY FACTOR
COMMODITY FACTOR = 1.00 / NUM_COMMODITIES
(Internal)
(field 26)
COMMODITY DEVIATION “Absolute Value” = % of REVENUE - COMMODITY FACTOR
(Internal)
(Internal)
(Internal)
Sum of COMMODITY DEVIATION FACTORS = Sum of all COMMODITY DEVIATIONS
(Internal)
(Internal)
DIVERSITY_FACTOR (DF) = Formula based on number of commodities (see above)
(field 36)
(Internal)

AGR RATE
AGR_RATE = DIVERSITY_FACTOR * TOTAL_WEIGHT_RATE
(field 37)
(field 36)
(field 35)

FCIC-APPENDIX III

151-1 - 2

RY 2008

June 28, 2007

Exhibit 151-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE (AGR)/LITE (AGR-L)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
32

Picture
9(10)

Rounding
whole dollar

Description
Value will equal average AGR, indexed
AGR, or expected income.

COVERAGE LEVEL

Internal

9.999999

None

Coverage level submitted under the
Crop Policy Section.

25

9.9999

None

Payment rate selected in combination
with coverage level.

34

9(10)

nearest whole
dollar

Liability cap, cannot exceed $6.5
million for AGR and $1 million for
AGR-L.

MAX MPCI

Internal

9(10)

nearest whole
dollar

Result of Liability times 0.50.

33

9(10)

whole dollar

Must have MPCI crops listed as
commodity code.

PREMIUM LIABILITY

Internal

9(10)

nearest whole
dollar

Liability reduced by “Max or MPCI
Liability”.

37

.999

3 decimal places

Calculated rate (diversity factor
multiplied by total weight rate).

38

9(10)

nearest whole
dollar

Premium including subsidy. Premium
liability multiplied by AGR rate.

SUBSIDY FACTOR

Internal

.999

3 decimal places

Subsidy percent converted to factor.

39

9(10)

nearest whole
dollar

Total Premium multiplied by Subsidy
Factor.

44

9(10)

nearest whole
dollar

Premium after subsidy. Total Premium
minus Subsidy.

FCIC-APPENDIX III

151-1 - 3

RY 2008

June 28, 2007

Exhibit 151-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE (AGR)/LITE (AGR-L)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

Tag

No.
59

Picture
9(10)

Rounding
whole dollar

Description
Results of field 55 (acres, etc.) times
field 56 (yield) times field 58 (expected
value).

28

9(10)

whole dollar

Sum of all commodity values.

% of REVENUE

Internal

9.999

3 decimal places

Percent of total income for this
commodity.

COMMODITY RATE

Internal

99.999

none

The whole farm rate from the ADM 9.

WEIGHTED
COMMODITY RATE

Internal

99.999

3 decimal places

Commodity rate multiplied by % of
Revenue.

35

99.999

3 decimal places

Sum of all weighted commodity rates.

26

999

none

Total number of commodities reported.

COMMODITY FACTOR

Internal

9.999

3 decimal places

Result of 1.00 divided by number of
commodities.

COMMODITY
DEVIATION

Internal

9.999

3 decimal places

Result of % of Revenue minus
commodity factor.

Sum of COMMODITY
DEVIATION

Internal

9.999

3 decimal places

Sum of all commodity deviations.

36

9.999

3 decimal places

Result of the Diversification Factor
(DF) Formula that’s based on the
number of commodities.

37

.999

3 decimal places

Calculated rate (diversity factor * total
weight rate).

FCIC-APPENDIX III

151-1 - 4

RY 2008

June 28, 2007

Exhibit 151-1

FCIC-Appendix III

ADJUSTED GROSS REVENUE (AGR)/LITE (AGR-L)
LIABILITY/PREMIUM CALCULATIONS
Edit Description

UNIT OF MEASURE (UOM)
UNIT MEASURE
ACRE
BAG/SACK
BALE
BARREL
BOX
BUSHEL
CARTON
DOZEN
EACH
FLAT
GALLON
HEAD
HIVE
HUNDREDWEIGHT
LUG
OTHER
OUNCE
PACKAGE
PECK
PINT
PLANT
POUND
PURCHASED FOR RESALE
QUART
SQUARE FOOT
TON

UNIT ABBREVIATION
ACRE
BG/SK
BALE
BARRL
BOX
BU
CTN
DOZ
EACH
FLAT
GAL
HEAD
HIVE
CWT
LUG
OTHER
OZ
PACKG
PECK
PINT
PLANT
POUND
PFR
QT
SQ/FT
TON

UNIT NUMERIC CODE
20
11
12
10
13
01
14
15
97
16
07
17
18
03
19
99
05
21
09
06
22
02
98 **
08
23
04

** If the commodity code is 0073 or 0600 the unit code will be 98 and the Expected Value field will be zero.

FCIC-APPENDIX III

151-1 - 5

RY 2008