By Tom Hance
On July 13, the U.S. Department of Agriculture (USDA) announced the authorization of emergency procedures to help producers impacted by extreme drought conditions. The USDA’s Risk Management Agency (RMA) is working with crop insurance companies to streamline and accelerate the adjustment of losses and issuance of indemnity payments to crop insurance policyholders in impacted areas. These new crop insurance flexibilities are part of USDA’s broader response to help producers impacted by drought in the west, northern Great Plains, Caribbean and other areas.
“Crop insurance helps producers weather natural disasters,” said RMA Acting Administrator Richard Flournoy. “We recognize the distress experienced by farmers and ranchers because of drought, and these emergency procedures will authorize insurance companies to expedite the claims process, enabling them to plant a new crop or a cover crop.”
Emergency procedures allow insurance companies to accept delayed notices of loss in certain situations, streamline paperwork, and reduce the number of required representative samples when damage is consistent. These flexibilities will reduce burdens on both insurance companies and producers to help mitigate drought effects.
Producers should contact their crop insurance agent as soon as they notice damage. The insurance company must have an opportunity to inspect the crop before the producer puts their acres to another use. If the company cannot make an accurate appraisal, or the producer disagrees with the appraisal at the time the acreage is to be destroyed or abandoned, the insurance company and producer can determine representative areas to be left intact and maintained for future appraisal purposes. Once an insured crop has been appraised and released, or representative strips have been authorized for later appraisal, the producer may cut the crop for silage, destroy it or take any other action on the land, including planting a cover crop.
Tom Hance is a policy analyst at Gordley Associates in Washington, D.C.