Agricultural News
Crop Insurance Changes Imperil Oklahoma Producers' Winter Wheat Options
Fri, 13 Sep 2013 16:59:33 CDT
In a good year in Oklahoma as well as in parts of Kansas and Texas, many wheat producers are able to get a dual harvest. They can harvest forage in the form of wheat pasture for calves during the winter and either hay their wheat the following spring or harvest it for grain.
Terry Detrick, president of American Farmers and Ranchers, says that this system could soon come to a screeching halt. He spoke recently with Ron Hays and says Oklahoma has been notified it is part of a six-state area targeted for changes in crop insurance. He says that under the new program to be put in place after the 2014 crop year, producers will no longer be able to get insurance through the FSA that will protect them for dual crops.
The insurance which will be available will solely be based on rainfall. Detrick says the new program is deeply flawed.
"Originally, the intent of Congress from the beginning on crop insurance including the NAP programs was to have multi-peril-type coverage. And this takes all coverages away except dealing with rainfall."
He says that 2.5 million acres in Oklahoma were planted last fall with the intent of grazing in the winter and harvesting either grain or hay in the spring. That is a lot of acres and a lot of money at risk.
Detrick said the program that will be imposed would not provide adequate coverage. He said research into it shows it would have been beneficial to producers in only two out of the last 30 years. It would not have paid in several years with crop losses due to factors other than rainfall discrepancies.
Even if individual producers were willing to bear the risk, Detrick says creditors wouldn't allow it. They must have adequate insurance in place before they can make production loans.
Without the ability to borrow, Detrick says, most producers couldn't afford to run cattle on pasture in the winter.
He says the proposed insurance based on rainfall deviation has its place, but it can't replace multi-peril insurance that is currently available.
"If they want to add that as an option that a person can go to and say, 'All that I'm worried about is rainfall, I live in a part of the state where I don't worry about freeze out or whatever and all I'm worried about is rainfall,' that probably could still be an option. But, I think for a majority of that 2.5 million acres, there is a lot of people who would like to opt out of rainfall and continue to get NAP coverage."
Detrick said this program originated with Congress and it is up to Congress to fix it before the end of 2014. He said the ideal time to fix it is now with the current farm bill still waiting to go to a conference committee. He says Congressmen Frank Lucas and Tom Cole are aware of the problem and that most of the 2.5 million acres affected are in their districts.
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