Clarifying the rules

A roundtable discussion was held in Minot Tuesday to help clarify some of the prevented plant rules that are oftentimes about as clear as mud.

Sen. John Hoeven, R-N.D., kicked off the discussion with a presentation outlining some of the changes farmers and insurance agents can look forward to starting with the 2014 growing season. He said prior to 2011, farmers had to plant a crop at least once in three years for that land to qualify for prevented plant. In 2011 that requirement was changed to one in four years.

“We thought, boy that’s a big improvement,” Hoeven said. “The problem was that RMA (Risk Management Agency) adopted some other what they called ‘special provisions’ at the time that were very confusing, very problematic.”

One special provision in particular called for normal weather years, which were subject to interpretation, in order for land to qualify for prevented plant. Another disqualified land if marsh vegetation was present, such as a single cattail.

“That should greatly simplify the provisions for prevented plant crop insurance and make it much simpler and much more user friendly,” Hoeven said.

In addition, if a producer isn’t able to plant and harvest a crop for at least one in four years on a certain acreage, they will need to demonstrate the land is farmable by planting and harvesting on it for two years in a row, or incur an insurable loss other than for excess moisture.

These changes will go into effect Nov. 30.

Hoeven then made a short presentation on crop insurance, noting RMA needs to make sure existing crop insurance rules are clear and workable.

In an overview of the Senate farm bill, Hoeven said it saves more than $24 billion over 10 years and eliminates direct payments.

“So really the key going forward is good, quality federal crop insurance,” Hoeven said.

The Senate bill also adds a supplemental coverage option and agriculture risk coverage, reauthorizes the sugar program and extends livestock disaster assistance programs through 2018.

One of the biggest fears insurance agents expressed during the roundtable discussion was having RMA looking over their shoulder and overruling their determinations this year. Tim Hoffmann of RMA said that given the current rules in place for 2013, he doubts the compliance personnel of RMA will be doing that.

“At the end of the day the insurance folks know the PRISM program,” said Brandon Willis, RMA administrator. “If in fact it was not abnormally dry, it’s not that hard to document it. Even I could probably do that.”

Steve Axtman of Rain and Hail Agricultural Insurance brought up another point that worried him. Although the one year in four planting requirement seems simple enough to determine, he was worried about an additional provision still in place for the 2013 growing season that states the land must be normally available for planting. He asked if a crop must be planted in the acreage in question 40 percent of the time before before it can qualify for prevented plant, or if planting a crop during one of the past four years is enough for qualification, regardless of what that land’s past planting history is.

He said while some companies pay out a claim if the land adheres to the one in four rule, others won’t pay unless the land also is planted 40 percent of the time. He said the different rules different companies follow frustrates producers and insurance agents alike, and he wanted some clarification on what exactly insurance agents should be doing in this situation.

“Honestly I don’t really care what it is. I need something that I can go back and (show producers). … And the big problem is, if I pay this is compliance coming to look over my shoulder?” Axtman said. “That’s kind of the fear.”

“So it’s the eligibility versus availability question?” Heitkamp asked.

“Right,” Axtman replied.

“We still are struggling with it,” Heitkamp said.

While the availability rule will be dropped for the 2014 growing season and beyond, for this year Hoeven said producers and agents will still have to work with it and try to do the best they can.

“The old rule was the old rule,” Hoeven said. “You’re going to have to work through it and try to get the most reasonable decision you can out of your company.”