Prevented-plant Crop Insurance Adjustments, Weaknesses

IMG_1672Above is a photo I took of some cropland east of Dickinson, N.D., that wasn’t planted on July 2, 2014. It was a prevented-plant (PP) crop insurance situation because of some very wet planting season weather.

Of all of the input I receive from readers, PP is the tops. Several times a year I will get a phone call or e-mail from some farmer, wanting to know who to contact about the neighbor who outbids younger farmers for land rent and then has land that goes unplanted while neighbors seem to get their work done.

In one case, a south-central North Dakota farmer was talking about the farmer who had eight quarters unplanted — about 1,200 acres. The

Another story was about the fellow who failed to plant canola by the planting date, collected the 35 percent PP insurance, and then went ahead and planted the crop the neighbors allege they intended to plant all along. There was the insurance agent that told me that  this kind of thing isn’t as lucrative as people say it is, that the PP benefits are declining. But there’s something pervasive going on when an extension official declined to comment about PP at all, saying it is so rife with potential abuse.

Me? I think a big problem with the PP is that it is enormously difficult to enforce this kind of program across all of the variability of the American cropping picture. I think the prairie pothole region of the Dakotas are more difficult to keep it all straight. I think part of the problem is how the crop insurance companies and their adjusters view the system.

Regardless of the fraud potential, the U.S. Department of Agriculture is looking at some changes in the  program. In the March 2 issue of Agweek magazine look for a brief summary of some of the proposed changes a consultant, Agralytica of Alexandria, Va., has suggested to the USDA’s Risk Management Agency for formula changes that could affect such crops as corn, potatoes and green peas in our region. RMA officials say these ideas are more in the trial balloon stage — not yet to the point of proposed rules. But I’m thinking those steps aren’t far behind.

If you wish to offer input on this, I’m all ears — fingerprints or not.  My phone number — 701-297-6869 — is published in Agweek every week.

 

1 Response

  1. Rep. Marvin E. Nelson

    Just noticed this. I think their study is pretty good, payouts for PP need a little tweeking to be pretty close between crops.

    As an ag consultant, I often hear people complain about someone and that he is taking the easy road with PP. Then later I talk to that guy and he is so mad he couldn’t get it planted. Usually nothing but a mess.

    The numbers are pretty clear, the reason the claims are so high in ND and SD is the nation has decided our job is to raise ducks. Excess moisture is far and away the biggest payout. Drain tile would significantly reduce insurance payouts. Normally, insurance would reward you for management to reduce the insurance losses, but not in this case. You drain, they take away any subsidy, even though you are clearly reducing their losses. Then if it stays too wet to plant, they take away everything after a few years. If they gave you credit for the reduction in their losses, it would probably about even out with losing the subsidy.

    Since the national priority is ducks, they should quit limiting the years of PP and just pay.

    It’s tough when farmers are not being allowed to adjust to climate changes by the government and then the government wants to pretend they are some kind of crook because rain and cool weather and the crops can’t get planted timely.

Comments are closed.