Ag committee rejects crop insurance cuts

Posted October 29, 2015

House Agriculture Committee members state there will be no cuts to the crop insurance program in the upcoming budget, according to an AgWeb article available here. High Plains Journal also published an article available here.

“Leadership has heeded our concerns by agreeing to completely reverse this disastrous provision in the upcoming omnibus,” said Michael Conaway in a prepared statement. “Crop insurance is working as intended, and private industry deserves to be lauded, not thrown under the bus.”

The budget proposal called for capping the rate of return on earned premiums at 8.9% for crop insurers for 2017-2016. It would have saved the federal government an estimated $3 billion, but potentially hurt the viability of the federal crop insurance program and the financial health of the crop insurance industry.

Agriculture Committee Chairmen Sen. Pat Roberts, R-Kansas, and Rep. K. Michael Conaway, R-Texas, and Ranking Members Sen. Debbie Stabenow, D-Michigan, and Rep. Collin Peterson, D-Minnesota, stood united against reopening the 2014 farm bill to further cuts, according to High Plains Journal.

“Farmers and ranchers have done more than their fair share to reduce government spending,” said Chairman Roberts.

“To target the No. 1 priority for producers with additional cuts will undermine the delivery of this important protection for agriculture. While congressional leaders may sell this package as providing budget stability, it is anything but stable for farmers and ranchers. It took years to negotiate and pass a new farm bill. Producers have signed contracts and purchased policies. These proposals to make further cuts to the crop insurance program were not included in the House or Senate passed budgets, in any appropriations bills or in the president’s budget request. Once again, our leaders are attempting to govern by backroom deals where the devil is in the details. I will continue to oppose any attempts to cut crop insurance funding or to change crop insurance program policies.” 

After the House, the spending bill goes to the Senate, where the Senate Agriculture Committee leaders have also vowed to protect the crop insurance program, according to AgWeb.

"We hope Senate Leadership finds a path forward soon to ensure these cuts are not realized," said the Crop Insurance Reinsurance Bureau, National Crop Insurance Service and American Association of Crop Insurers said in a joint statement.

"Today's action shows that crop insurance is truly the centerpiece of agricultural risk management and rural America is willing to fight to maintain the crop insurance program. Crop insurers remain committed to providing superior service to our customers--America's farmers--who desperately need risk management tools to deal with today's extreme weather and falling crop prices."

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Missouri sues USDA over crop insurance deadlines

Posted July 22, 2015

 
Missouri filed a lawsuit pushing the federal government to extend a key agricultural deadline, which is necessary to keep many of the state's farmers eligible for crop insurance, according to a News Leader article available here. Insurance Journal also published an article available here and KSPR here.

Attorney General Chris Koster filed the federal lawsuit against Tom Vilsack, U.S. Secretary of Agriculture.

"Missouri farmers rely on the availability of insurance to guard their crops against events beyond their control," Koster said a press release. "The USDA should not punish farmers whose planting was delayed by unexpected rain and flooding by enforcing an arbitrary deadline. Millions of dollars in Missouri agriculture is at risk, and we will fight to make sure these resources are protected."

Sixty percent of Missouri farmers could be ineligible for crop insurance this year, because heavy rainfalls and floods will prevent them from meeting the reporting deadline.

The USDA requires farmers to report their planted acreage each year by a fixed deadline, which is July 15 for farmers in northwest Missouri. Rainfall over the past two months caused severe flooding so severe that the Governor declared a state of emergency. Many farmers were unable to plant their crops in time to get accurate acreage reports filed, even with the five-day grace period normally allowed by the USDA, according to KSPR.

His lawsuit asks a federal court to require that the agriculture agency give farmers 15 additional days to file reports, according to Insurance Journal.

The federal agriculture department says by law it cannot extend the deadline, but said it will work with farmers to help them maintain coverage.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Rep. Kristi Noem: Congress Will Pass Farm Bill

Rep. Kristi Noem (R-SD), member of the House Agriculture Committee, says that Congress will pass a farm bill “in the coming months” according to an article by the Argus Leader, available here.  According the article, Noem indicated that:

“My leadership team has told me that it’s going to happen, because I’ve been pretty ugly with them at different times.”  She continued, “So I’m taking them at their word that they’re going to make sure it gets scheduled and they’re going to make sure we’ve got the votes.” 

The farm bill continues to be a contentious issue in Congress over issues including the nutrition title, farm program payments, and even a catfish inspection program.  For more background on these issues past posts on this blog are available here, here, and here. 

The Senate has had success passing a farm bill, but the road to success has been far more challenging in the House.  In 2012, the House Agriculture Committee passed a farm bill, but it was never brought up for a vote in the House.  The 2012 outcome illustrates the deep divisions on certain issues, which is on only display when the House initially failed to pass a farm bill earlier this year.  Later, the House split the nutrition title from the farm bill that paved a possible path forward for getting a competing bill that could be conferenced with the Senate.  Notably, the House-passed bill would also repeal the 1938 and 1949 permanent laws that have been the backstop to getting previous farm bills across the legislative finish line.  Indications have been that the House will bring up a nutrition-only bill in September, following the August recess, that would cut nutrition programs by about $40 billion.  That said, significant doubts have been expressed about the political viability of that approach.

Fireman's Fund to Pay $44M

Posted March 24, 2015

The Fireman’s Fund Insurance Co. has agreed to pay $44 million to settle allegations under the False Claims Act, according to an Insurance Journal article available here. Reuters also published an article available here.

According to the allegations, they knowingly issued insurance policies that were ineligible under the U.S. Department of Agriculture’s (USDA) federal crop insurance program and falsified documents.

Between 1999 and 2002, Fireman’s Fund operated a crop insurance business and participated in the federal crop insurance program. Under the program, Fireman’s Fund sold and serviced crop insurance policies that were reinsured by the USDA for a portion of the risks.

Crop insurance protects farmers against losses attributable to natural disasters such as disease, droughts, floods, freezes and hail, as well as falling commodity prices, according to Reuters

The Justice Department said the Fireman's Fund settlement involved no determination of liability.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

John Deere Announces Private-Crop Insurance

Posted January 16, 2015

John Deere Insurance Company has released a new private crop-insurance policy, Added Value Protection, to protect against yield shortage, according to an Agri View article available here. John Deere also published a statement here and Farm Futures here.

The program works with a producer's Multi-Peril Crop Insurance policy, and it allows a producer to purchase additional coverage protecting a portion of their annual yield, according to Farm Futures.

John Deere also announced an optional endorsement to this new policy, BASF Risk Protection Optional Endorsement, in collaboration with BASF.

To receive these benefits, applicants must complete the requirements of either the BASF Risk Advantage or BASF Investment Advantage programs, including purchasing three BASF qualifying products for a minimum of 500 acres per insured crop from a BASF representative before the applicable Multi-Peril Crop Insurance sales closing date, and applying to insured crops, according to Agri View.

The Added Value Protection Policy now in 31 states: Alabama, Arkansas, Colorado, Delaware, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Virginia, West Virginia, Wisconsin, and Wyoming, according to Farm Futures.

If approved, the coverage will also be available in Maryland, Tennessee, Texas, and Washington.

For more information, visit John Deere’s website here.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

 

Schumer Seeks Crop Insurance for Barley Farmers

Posted January 13, 2015

Senator Chuck Schumer is establishing an insurance program benefiting Capital region farmers growing malt barley for craft beer and distilling industry, according to a Daily Journal article available here. ABC News10 also published an article available here and WKBW here.

Malt barley is essential to the growth of the craft beer industry.

Currently, there is no federal insurance for malt barley in New York, making it difficult for craft brewers, because they will be required by law to source 90 percent of ingredients from local farms and malt houses, according to News 10.

“All you need is some bad weather, hail or early frost or it can be some international condition. All of a sudden another country jumps a huge amount of product on the market. And you’re stuck. So farmers more than just about anyone need insurance,” said Schumer.

Schumer will discuss the issue late Monday morning at the Albany Distilling Company.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

RMA Releases APH Yield Excursion Program Details

Posted December 22, 2014

U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) released additional details of the Actual Production History (APH) Yield Excursion Program, according to an Agri-Pulse article available here. Farm Futures also published an article here and Hoosier Ag Today here.

The APH Yield Excursion program was part of the 2014 Farm Bill, and it allows “troublesome years to be excluded from farm APH when the average county yield is at least 50 percent below the 10 previous consecutive crop years' average yield.”

Beginning in the 2015 crop year, the program will be available in the actuarial documents for spring planted corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn to will allow producers who experienced severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program.

“APH Yield Exclusion will provide additional options to producers who have suffered from devastating natural disasters,” said RMA administrator Brandon Willis in a release.

The amount of insurance available is based on the farmer's average historical yields, according to Farm Futures.

Previously, a year with particularly low yields due to severe weather beyond the farmer's control would reduce the amount of insurance available to the farmer in future years. When unpredicted bad years occur, farmers will not have to worry about a natural disaster reducing their amount of insurance in the future years.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

ND Brothers Found Guilty of Crop Insurance Fraud

Posted December 15, 2014

A federal jury found potato farmers Aaron and Derek Johnson guilty of crop insurance fraud, according to an AgWeek article available here. Inforum also published an article available here and Valley News Live here.

The jury unanimously found the Johnson brothers guilty of intentionally destroying part of their crops to receive unfair gains in crop insurance and federal disaster payments. Both brothers were convicted of conspiracy and false statements to the U.S. Department of Agriculture Risk Management Agency. Aaron Johnson was also found guilty of lying to the USDA Farm Service Agency.

A sentencing hearing is scheduled for March 9 at 1:30 p.m. in Fargo, North Dakota, and both brothers have been released, according to Inforum.

The brothers were accused of damaging potatoes from 2002 to 2010, collecting almost $2 million in crop insurance and federal disaster payments. The testimonies centered around allegations that the Johnsons ruined their 2006 crop by adding chemicals such as Rid-X, as well as heat, water, and frozen potatoes to their stored potatoes.

The Johnsons were charged individually and have denied all charges.

The Johnsons and their farming operations gained millions of dollars in federal crop insurance indemnities, subsidized crop insurance premiums, and federal disaster benefits, according to Valley News Live.

The brothers face up to 30 years in prison and millions of dollars in fines, restitution, and criminal forfeiture.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Climate Change Could Increase Crop Insurance Losses

Posted November 26, 2014

Climate change could increase losses in flood and crop insurance programs significantly in coming decades, according to a USA Today article available here. Agri-Pulse also published an article available here and Insurance News here.

The Government Accountability Office’s (GAO) report found that exposure to losses for property insured under the two programs grew from 8 percent to $1.4 trillion over the past six years due to population growth and increased property values in hazard-prone areas.

The GAO study says climate change “may substantially increase losses by 2040 and increases losses from about 50 to 100 percent by 2100,” according to Agri-Pulse.

“(FEMA and RMA) face challenges that may limit their ability to minimize long-term federal exposure to climate change,” the report summary said. “For example, because of the short-term nature of insurance (i.e., contracts typically estimate and communicate risk of property losses for the 1-year term of a policy), FEMA and RMA face a challenge in encouraging policyholders to reduce their long-term exposure to climate change risks.”

FEMA is currently $24 billion in debt because of extreme weather events, and in 2006 the GAO labeled the National Flood Insurance Program as "high risk" for long-term insolvency, according to Insurance News.

The GAO made two recommendations for FEMA and USDA to better manage the risk to taxpayers:

FEMA should update building standards for floodplain management, including additional flood-proofing for resilience to sea-level rise and extreme weather events.

USDA should incorporate climate change resilient agricultural practices into their "good farming practices" guidance, such as conservation tillage, water conservation, and modified crop planting dates to sustain long-term production in a changing climate.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

USDA to Expand SCO for 2016 Crop Year

Posted November 24, 2014

The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) has announced that it is evaluating the possibility of more than 40 additional crops that may be covered under Supplemental Coverage Option (SCO) insurance for the 2016 crop year, according to a RMA release available here. Insurance News also published the release here.  

SCO is a provision of the 2014 Farm Bill, and it was developed to help protect producers from yield and market volatility. Currently, corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring wheat, and winter wheat in selected counties for the 2015 crop year are eligible for SCO. A list of the crops under review can be found on the RMA website here. RMA will provide SCO coverage for any crop under review that has adequate data to operate SCO.

"USDA is committed to making crop insurance available to as many farmers as possible. Expanding SCO to additional crops will provide producers another safety net option," said RMA Administrator Brandon Willis.

RMA has developed an online Crop Insurance Decision Tool to help producers decide whether SCO is right their operation. The tool will help farmers understand how SCO coverage is determined, when it pays, the approximate premium cost, and how it interacts with traditional crop insurance.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Vilsack Announced New Crop Insurance Program

Posted October 23, 2014

Agriculture Secretary Tom Vilsack has announced a new Farm Bill initiative that will provide relief to farmers that were affected by severe weather, including drought, according to a U.S. Department of Agriculture (USDA) news release available here. Agri-Pulse also published an article available here, Hoosier Ag here, and Politico here.

The Actual Production History (APH) Yield Exclusion will be available nationwide in spring 2015, and it allows eligible producers, those who have suffered severe weather, to receive a higher approved yield on their insurance policies through the federal crop insurance program.

Crops eligible for APH Yield Exclusion include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn. Almost three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion.

Secretary Tom Vilsack said the provision allows growers to manage their risk more efficiently, according to Hoosier Ag Today.

“Key programs launched or extended as part of the 2014 Farm Bill are essential to USDA’s commitment to help rural communities grow. These efforts give farmers, ranchers, and their families better security as they work to ensure Americans have safe and affordable food. By getting other 2014 Farm Bill programs implemented efficiently, we are now able to offer yield exclusion for Spring 2015 crops, providing relief to farmers impacted by severe weather,” said Vilsack.

The original implementation date was scheduled for 2016. The earlier release will be an extra burden for crop insurance companies. Vilsack’s staff and the Risk Management Agency (RMA), which oversees the federal crop insurance program, have “downplayed” the politics surrounding the situation, according to Politico.

“It’s not about elections; it’s not about politics. It’s about good, hard-working people doing their job and doing a helluva job,” said Vilsack.

David Cleavinger, a Texas Wheat Producers Association (TWPA) board member and Texas farmer, said that without this APH change, after several years of severe drought his crop insurance coverage will continue to erode. 

“I haven't harvested an acre of dryland wheat since 2010,” said Cleavinger. “I ran very conservative figures on one dryland wheat section in Deaf Smith County, and by dropping the yields from three qualifying years, I would be able to increase my APH from 23 bushels per acre, to 28.”

House Agriculture Committee Chairman Frank Lucas, R-Okla., commended Secretary Vilsack and his team on their implementation efforts.

“The APH adjustment means everything to farmers all across the country who have suffered through year after year of devastating drought conditions. It is the difference between having viable crop insurance for the coming year or not. It is for these reasons that I worked to include the APH adjustment in the farm bill and why I am pleased the Secretary redoubled his efforts to get it done this year. I remain hopeful that USDA will also work to make the same relief available to winter wheat producers," said Lucas.

For more information on farm bills and disaster programs, please visit the National Agricultural Law Center’s website here and here.

GAO Released Crop Insurance Study

Posted September 9, 2014

The cost of the federal crop insurance program and farm sector income and wealth has grown significantly since 2003. The cost has risen from an average of $3.4 billion per year in 2003 to $8.4 billion a year for fiscal years 2008 through 2012, according to the U.S. Government Accountability Office’s (GAO) website.

Federally subsidized crop insurance, which farmers can buy to help manage the risk inherent in farming, has become one of the most important programs in the farm safety net. Revenue policies, which protect farmers against crop revenue loss from declines in production or price, are the most popular policy type accounting for 80 percent of all premium subsidies.

The GAO was asked to investigate the cost of the crop insurance program. This report examines "(1) trends in federal crop insurance costs and farm sector income and wealth from 2003 through 2012 and (2) the potential savings to the government and impacts on farmers, if any, of reducing federal premium subsidies for revenue policies."

GAO analyzed U.S. Department of Agriculture (USDA) crop insurance program data and farm sector income and wealth data from 2003 through 2012, reviewed economic literature and documents from stakeholders, including farm industry groups and researchers, and interviewed USDA officials.

For more information, the GAO report is available here. The highlights of the report are available here.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

FCIC Finalizes Insurance Rule

Posted July 29, 2014

The Federal Crop Insurance Corporation (FCIC) has finalized the Common Crop Insurance Regulations, Pear Crop Insurance Provisions.

The rule is intended to improve coverage available to pear producers, to clarify existing policy provisions to better serve insured producers, and to reduce vulnerability to program fraud, waste, and abuse.

The proposed changes will be effective for the 2015 and succeeding crop years.

The rule is in effect August 27, 2014.

The Federal Register is available here.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

Concerns Over Conservation Regulations Rise With Vegetable Producers

Posted July 29, 2014

Last week, U.S. Department of Agriculture (USDA) informed producers of their obligation to comply with conservation regulations in order to purchase crop insurance and some vegetable producers have concerns, according to a Delta Farm Press article available here.

The Florida Fruit and Vegetable Association (FFVA) expressed their concerns to Congress and the USDA during consideration, because it will affect some producers more than others, depending on type of farm.

Agriculture Secretary Tom Vilsack stated that all producers must file new paperwork with their local Farm Service Agency office.

“It’s important that farmers and ranchers taking the right steps to conserve valuable farm and natural resources have completed AD-1026 forms on file at their local Farm Service Agency office,” he said. “This will ensure they remain eligible for crop insurance support.”

Permanent crops are commodities produced without “annual tilling of the soil,” and are mostly exempted from this requirement, but the paperwork must still be filed in order to be eligible for the federal subsidy under crop insurance programs.

For crops that are “annually tilled,” an obligation may be required to have a certified conservation plan in place along with other restrictions, which depends on if the land is highly erodible or a wetland as defined by the USDA.

USDA is conduction a listening session on August 7 in Gainesville, Florida to receive comments from the industry.

For more information on crop insurance programs, please visit the National Agricultural Law Center’s website here.

House Subcommittee Hearing Examines Benefits of Ag Biotech

Posted July 21, 2014

On July 10, the Subcommittee on General Farm Commodities and Risk Management held a hearing to examine the U.S. Department of Agriculture (USDA)’s efforts as it implements the new commodity and crop insurance titles of the Agricultural Act of 2014, according to a High Plains Journal article by Larry Dreiling available here. The Wisconsin Ag Connection also published an article available here.

“I commend USDA’s initial efforts to implement the Agricultural Act of 2014, and I challenge them to fully deliver on the promises made to our farmers and ranchers in the law,” said chairman Mike Conaway, R-TX. “Specifically, USDA must make it a priority to implement the Actual Production History (APH) adjustment because it provides critical relief for producers who have struggled with severe and devastating drought conditions for the past four years.”

Acting Chairman Rodney Davis (R-IL) said that it was important to hold this hearing on the benefits of biotechnology, because the stakes are high and biotech has a story to tell, according to Wisconsin Ag Connection.

"Our farmers have the vital job of feeding a growing world and biotechnology is part of the solution. I'm excited for the future and believe the United States must continue to safely innovate through biotechnology to achieve higher crop yields, fewer hungry people and an improved environment," Davis said.

Conaway and others have asked the USDA to implement the adjustment in time to help farmers afford to plant their crops for the 2015 harvest, but the USDA will not be able to put in place until the fall of 2015 for 2016 crops, according to High Plains Journal.

“After years of prolonged drought, [Oklahoma farmers] are now paying much higher rates,” said House Agriculture Committee chairman Frank Lucas, R-OK, one of the farm bill’s four architects.

The farm bill provision will allow producers to exclude years of poor yields from the APH calculation to establish insurance policies if the average crop yield in a county for any one crop is 50 percent below the county’s 10-year average.

For more information on biotechnology, please visit the National Agricultural Law Center’s website here.

AFPC Released Farm Bill Decision-Aid Tool

Posted July 3, 2014

The Agricultural and Food Policy Center (AFPC) at Texas A&M University released a preliminary version of a 2014 Farm Bill decision-aid tool for farmers, according to Texas Corn Producers (TCP) press release available here. Agri-Pulse also published an article available here. A previous blog post on the tool is available here.

The AFPC developed the tool with financial assistance from Texas Corn Producers, U.S. Department of Agriculture (USDA), and others.

Stephanie Pruitt, TCP communications director, said some farmers are excited about the product, according to Agri-Pulse.

“It's really giving farmers the opportunity to see how farm programs will impact their operations,” Pruitt said. “It gives them a chance to weigh their options.”

TCP urges farmers to remember that this is only a preliminary version, and it has not been finalized to incorporate the final rules, which have not yet been released by USDA Farm Service Agency, according to TCP statement.

TCP encourages farmers to watch two instructional videos prior to using the tool. The videos can be found on the AFPC website here.

The decision-aid tool is available on the AFPC website here.

For more information on farm bills, please visit the National Agricultural Law Center’s website here.