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Extra federal crop insurance payout intended to aid farms

WASHINGTON D.C. — Farmers unable to plant thanks to a historically wet spring this year will start receiving an extra federal crop insurance payment.

The additional funds won’t close the gap entirely on losses, but could make a major difference, especially for producers with a large amount of unplanted acres, said Executive Director Rodney Weinziero of the Illinois Corn Growers Assoc.

“It’ll better enable them to survive,” he explained.

According to the USDA, the bonus payments starting this month will be sent out automatically, relieving farmers of the burden of filling out paperwork to collect it. “It was a challenging planting season for many of our farmers. We are doing everything we can to ensure producers receive the help they need,” said Bill Northey, agency under secretary for Farm Production and Conservation.

All producers with a 2019 prevented planting indemnity related to flooding, excess moisture, or causes other than drought will receive the bonus payment, USDA stated. Those having Yield Protection and Revenue Protection with Harvest Price Exclusion coverage will receive a 10 percent payment; a 15 percent payment will go to farmers with Revenue Protection.

“Crop insurance is an important program for many producers to help them manage their production and price risks. We’re leveraging that system to efficiently and effectively deliver much needed support to our farmers,” said Martin Barbre, administrator of USDA’s Risk Management Agency.

The payment will be delivered to farmers by their approved insurance providers starting in mid-October. According to USDA, extra payments will be made in the middle of each month as more prevented planting claims are processed.

Rep. Collin Peterson (D-Minn.), chair of the U.S. House Agriculture Committee, said the convenience of the extra payment allows farmers to remain focused on getting through what’s been a trying year.

“As weather continues to throw wrenches into farmers’ plans, both in western Minnesota and across the country, I appreciate USDA and crop insurance providers moving forward in delivering this prevented planting plus-up that Congress provided,” he said.

Farmers reported they were not able to plant crops on more than 19.4 million acres this year, according to a USDA report released in August. That’s the highest number of unplanted acres since its Farm Service Agency began releasing the report in 2007, and approximately 17 million acres more than the amount of unplanted acres reported in 2018.

Seventy-three percent of the unplanted acres reported this year were in the Midwest, according to the report.

Depending on the policy, Weinziero said insurance covers at most about half of what an unplanted crop would have been valued. He said the bonus payments were justified because crop insurance is based on the December futures price during February, when optimism about trade was higher and before the unusually wet spring.

The ongoing trade war with China and the amount of unplanted acres being so extreme deserved coverage more on the scale of a disaster. “This helps make up that difference because of what’s going on in the marketplace,” Weinziero said.

According to USDA, South Dakota had 3.9 million unplanted acres reported, followed by Ohio and Illinois with 1.5 million each, then Missouri and Arkansas, at 1.3 million. Minnesota, Indiana, and Michigan were next in line with unplanted acres in those states ranging from 1.1 million to just over 900,000 each.

The Southeast wasn’t nearly as affected, with reported unplanted acres at 319,000 in North Carolina, 250,000 in Tennessee, 171,000 in South Carolina, 134,000 in Kentucky, 82,000 in Alabama, 60,000 in West Virginia, and 38,000 in Georgia.

10/8/2019