I 
108TH CONGRESS 
2D SESSION 
H. R. 4702 
To require farmers to be offered supplemental crop insurance based on an 
area yield and loss plan of insurance. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 24, 2004 
Mr. NEUGEBAUER introduced the following bill; which was referred to the 
Committee on Agriculture 
A BILL 
To require farmers to be offered supplemental crop insurance 
based on an area yield and loss plan of insurance. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. REQUIREMENT TO OFFER FARMERS SUPPLE-
MENTAL CROP INSURANCE BASED ON AN 
AREA YIELD AND LOSS PLAN OF INSURANCE. 
(a) IN GENERAL.—Section 508(c)(3) of the Federal 
Crop Insurance Act (7 U.S.C. 1508(c)(3)) is amended to 
read as follows: 
‘‘(3) YIELD AND LOSS BASIS.—
‘‘(A) AVAILABILITY OF COVERAGE ON IN-
DIVIDUAL OR AREA YIELD AND LOSS BASIS.— 
A producer shall have the option of purchasing 
additional coverage based on an individual yield 
and loss basis or on an area yield and loss 
basis, if both options are offered by the Cor-
poration. 
‘‘(B) SUPPLEMENTAL AREA COVERAGE.— 
‘‘(i) AUTHORITY
TO
OFFER
COV-
ERAGE.— 
‘‘(I) 
IN
GENERAL.—Notwith-
standing section 508(c)(4), if area 
coverage is available in the area (as 
determined by the Corporation), the 
Corporation may provide producers in 
that area that purchase an additional 
level of coverage for an insurable com-
modity based either on an individual 
yield and loss plan of insurance or a 
revenue plan of insurance that in-
cludes coverage for a loss in yield, as 
applicable, the option to purchase sup-
plemental insurance coverage based on 
an area yield and loss plan of insur-
ance.
‘‘(II) LIMITATION.— The sum of 
(a) the coverage level expressed in 
percentage terms for the individual 
yield and loss plan of insurance or a 
revenue plan of insurance that in-
cludes coverage for a loss in yield, as 
applicable, and (b) the share ex-
pressed in percentage terms of the 
area yield and loss plan of insurance 
(at whatever coverage level is selected) 
that is used to determine the level of 
supplemental insurance coverage shall 
not exceed 100 percent. 
‘‘(ii) INDIVIDUAL
YIELD
AND
LOSS 
PLAN REQUIRED.—To be eligible for sup-
plemental coverage under this subpara-
graph, a producer must also purchase an 
individual yield and loss plan of insurance 
or a revenue plan of insurance that in-
cludes coverage for a loss in yield, as appli-
cable, at an additional coverage level for 
the same crop covered by the supplemental 
coverage. 
‘‘(iii) PAYMENT OF PORTION OF PRE-
MIUM.—The Corporation shall pay a por-
tion of the premium under a supplemental 
area yield and loss plan of insurance and 
the associated individual area yield and 
loss plan of insurance or revenue plan of 
insurance that includes coverage for a loss 
in yield, as applicable, in an amount de-
scribed in subsection (e). 
‘‘(iv) INDEMNITY
PAID
UNDER
SUP-
PLEMENTAL COVERAGE.— 
‘‘(I) AMOUNT OF INDEMNITY.— 
The indemnity payable under supple-
mental coverage shall be calculated 
as— 
‘‘(aa) the total indemnity for 
an area yield and loss plan of in-
surance at the coverage level cho-
sen by the producer; multiplied 
by 
‘‘(bb) the share of the cov-
erage of the area yield and loss 
plan of insurance selected by the 
producer. 
‘‘(II) SPECIAL
RULE
RELATING 
TO QUALIFYING LOSSES.—In the case 
of a qualifying loss in an area (as de-
termined by the Corporation) under a 
supplemental area yield and loss plan 
of insurance, subject to the applicable 
coverage limits, the total amount of 
the indemnity shall be available to the 
producer regardless of the loss in-
curred under the individual yield and 
loss plan of insurance or revenue plan 
of insurance that includes coverage 
for a loss in yield, as applicable, of the 
producer. 
‘‘(v) REINSURANCE YEAR.—Subject to 
availability of area coverage for the insur-
able crop in the area (as determined by the 
Corporation), the supplemental plan of in-
surance described in this subparagraph 
shall be made available by the Corporation 
not later than the 2005 reinsurance year.’’. 
(b) CONFORMING AMENDMENT.—Section 508(d)(2) 
of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) 
is amended— 
(1) by striking ‘‘additional coverage’’ the first 
place it occurs and inserting ‘‘additional and supple-
mental coverages’’; and 
(2) by adding at the end the following:
‘‘(C) In the case of supplemental area cov-
erage that, in combination with either the indi-
vidual yield and loss coverage, or a comparable 
coverage for a policy or plan of insurance that 
is not based on individual yield and does not in-
sure more than 100 percent of the recorded or 
appraised average yield indemnified at not 
greater than 100 percent of the expected mar-
ket price, the amount of the premium shall— 
‘‘(i) be sufficient to cover anticipated 
losses and a reasonable reserve; and 
‘‘(ii) include an amount for operating 
and administrative expenses, as determined 
by the Corporation, on an industry-wide 
basis as a percentage of the amount of the 
premium used to define loss ratio.’’. 
Æ