The second chapter explains the mechanics of LGM. Whereas the first chapter was a more general explanation of the program, this chapter discusses how expected and actual gross margins and gross margin guarantees are established as well as how LGM premiums and indemnities are determined.

Topics covered include:

• definitions of LGM terminology;
• how to access Expected and Actual Gross Margins, Gross Margin Guarantees, and premium rates from USDA-RMA;
• the process used by USDA-RMA to determine if an indemnity is paid;
• how to calculate LGM premiums; and
• how to collect an indemnity from LGM coverage.

• Chapter Two Text
• Chapter Two Slide Presentation
• Check for Understanding
• Answers
• Chapter Two Lecture

• To view the printed course materials and slides, you will need the Adobe Acrobat Reader
• To view the videos, you will need the free RealPlayer software available from Real.com.