Monsanto Company and ARMtech Insurance Services (ARMtech), an operating subsidiary of Endurance Specialty Holdings Ltd. (NYSE:ENH), are pleased to announce U.S. farmers can choose an additional risk management tool with Biotech Yield Assurance for the 2011 growing season. The crop insurance program, developed by approved insurance provider ARMtech in cooperation with Monsanto, links an insurance policy to the yield benefits of Genuity Roundup Ready 2 Yield soybeans, Genuity SmartStax and SmartStax corn.
For an incremental premium, Biotech Yield Assurance will enable eligible farmers to increase coverage by 10 % of the existing yield guarantee for each insured unit that is 100 % planted to Genuity Roundup Ready 2 Yield soybeans in the states of Illinois, Indiana, Iowa and Minnesota and each insured unit that is 95 % planted to Genuity SmartStax and SmartStax corn in the states of Iowa and Minnesota.
"Monsanto's trials have shown that Genuity Roundup Ready 2 Yield soybeans and Genuity SmartStax corn are consistent in high-yield production, allowing ARMtech to insure this additional yield with the new Biotech Yield Assurance policy," said Ted Etheredge, President of ARMtech. "Biotech Yield Assurance policy can help address the risk gap between new high-yielding genetics and actual production history (APH) used for insurance purposes," Etheredge added. "For example, a grower with an APH of 50 bushels and a Biotech Yield Assurance policy for Genuity Roundup Ready 2 Yield soybeans can bring his total unit coverage to 93.5 % and insure an additional 4.25 bushels. That's compared to a Multi-Peril Crop Insurance policy covering 85 % of APH – the highest coverage possible under federal crop insurance policies today."
If this farmer chooses 80 % coverage, then Biotech Yield Assurance would provide total unit coverage of 88 % of the APH, resulting in coverage of an additional 4 bushels.
"This is a really innovative insurance product, unlike anything we've seen in the industry," said Rob Heyen, a farmer, a principal at Crop Insurance Solutions and an appointed crop insurance agent of ARMtech. "Having an insurance product built on the strength of Genuity SmartStax and Genuity Roundup Ready 2 Yield gives the traits additional value for farmers."
This is the second risk management tool associated with the insurance industry in which Monsanto has played a key role. In 2008, Monsanto originated the Biotech Yield Endorsement program, the original program behind the Biotechnology Endorsement (BE), which lowers insurance premiums for corn farmers in 12 states who meet the program eligibility requirements and plant qualifying corn hybrids. The BE was approved by the Board of Directors of the Federal Crop Insurance Corporation (FCIC).
"We recognize farmers have a lot of opportunity and risk on every acre. It is exciting to be able to work with the insurance industry to bring innovative risk management solutions like the Biotechnology Endorsement and now Biotech Yield Assurance to help our customers manage risk," said Dr. Robert T. Fraley, Monsanto's Chief Technology Officer. "With Biotech Yield Assurance, there is now third-party acceptance from a leading insurance company of the lower risk of yield loss that Genuity Roundup Ready 2 Yield and Genuity SmartStax offer farmers, which is consistent with our research and development objectives."
ARMtech filed the Biotech Yield Assurance policy as a non-reinsured supplemental insurance policy with the states' insurance regulatory agencies and the USDA's Risk Management Agency, which administers the programs on behalf of the FCIC. Biotech Yield Assurance is not subsidized by the FCIC. Farmers interested in learning more about the program should contact ARMtech and other participating insurance providers.
Pending approval by each state's insurance regulatory agency and a review by the Risk Management Agency, the policy will be available for 2011 as a supplement to Multi-Peril Crop Insurance products.