For nearly 25 years, the Risk Management Agency has developed innovative crop insurance products to meet producer’s needs and provide an invaluable safety net in the wake of natural disasters.
During the last crop year, Federal crop insurance paid out roughly $10 billion in total indemnities. Nearly half of it was due to flooding and excess moisture. The worst flooding occurred along the Mississippi and the Missouri Rivers, with more than 215 levee breaches and approximately half a million acres submerged in Illinois, Iowa, Kansas, Nebraska, and hardest hit of all – Missouri, which accounted for 80 percent of the total flooded acreage. I witnessed the devastation firsthand along the rivers last summer. I’ll never forget seeing a barge stranded in the middle of what was once a corn field!
Thankfully, certain provisions in Federal crop insurance can provide critical relief. Because levee repairs are usually incomplete by the normal Contract Change Date in November, RMA adds a Breached Levee Special Provision for impacted areas, so that premium rates can be adjusted behind repaired levees.
The Breached Levee Special Provision increases flexibility to allow rate adjustments which include rates associated with repairs that occur before the crop insurance contract becomes effective. RMA has used similar Breached Levee Special Provisions in the past, such as after the disastrous floods of 2011.
In addition, this year we added a new flexibility. In determining premium rates for the crop year, RMA is considering levees which have been temporarily or partially repaired if certified by the U.S. Army Corps of Engineers or, in the case of non-federal levees, a licensed engineer. The rate offered to producers reflects the level of protection noted in the certification. Without these certifications, producers would pay significantly higher premiums. The difference this makes in operational costs cannot be overstated.
Our ability to help farmers affected by last year’s flooding has been a huge team effort. To ensure producers could leverage the new flexibility, the U.S. Army Corps of Engineers provided timely certifications for federally owned levees, and the Natural Resources and Conservation Service stepped in to certify repairs to numerous private ones. The Farm Service Agency organized panels and public meetings so we could inform our customers of options available to them.
As a result of our efforts, more than 1,200 farmers behind repaired levees can afford premium rates and are back in full operation this crop year. RMA will continue to meet the needs of farmers through teamwork and effective, flexible, market-based risk management tools to strengthen the economic stability of rural communities.
Martin Barbre is the Administrator for USDA’s Risk Management Agency. He has served as President of the National Corn Growers Association, a member of USDA’s Illinois Farm Service Agency State Committee, and is a long-time farmer from Carmi, Illinois.
Source: USDA RMA
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