Soy Growers: APH Provision a "Lifeline" for FarmersWed, 22 Oct 2014 15:17:23 CDT
A new provision included in the 2014 Farm Bill has the potential to be a "lifeline" for farmers following crop losses due to severe weather events and natural disasters, according to the American Soybean Association. The Actual Production History Yield Exclusion, or APH, allows farmers to exclude yields from exceptionally bad years, such as those brought on by severe weather or natural disasters from their production history when calculating yields used to establish their crop insurance coverage.
"The rollout of the APH program is a lifesaver for soybean farmers in so many parts of the country. It quite literally means the difference between continuing to farm following disastrous years, and being forced out of business," said ASA First Vice President Wade Cowan, who farms in Brownfield, Texas, and has experienced significant drought in each of the last four growing seasons. "Weather is the single biggest external factor in soybean farming. We have no control over its effects, but with the APH program, we can better respond to its impacts."
The APH program is significant given the formula used to calculate crop insurance coverage. Producers are able to purchase coverage based on that farmer's average recent yields. Formerly, a year of bad yields due to severe weather would reduce the yield coverage levels available in future years. Under the APH program included in the Farm Bill and announced yesterday by USDA, yields can be excluded from farm actual production history when the county average yield for that crop year is at least 50 percent below the 10 previous consecutive crop years' average yield. By excluding exceptionally unusual years, a farmer's overall yield average avoids a disproportionate reduction.
The APH exclusion, according to Cowan, takes on additional significance this year, given the decline in prices for many commodities. "Without the APH program, producers who have suffered severe weather would face the double-whammy of low prices and low yield protection," Cowan said.
According to USDA, spring crops eligible for APH Yield Exclusion include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn. Nearly three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion.
"Much credit should be given to the Agriculture Committees for including this provision in the Farm Bill, and then to Agriculture Secretary Vilsack and the team at USDA for rolling out this program for 2015 spring plantings," added Cowan. "The positive effects it will have for farmers, not only in the Southwest but nationwide, will be great evidence of its success."
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