Can prevented planting be improved? Farmers from three states weigh in

FARGO — A prevented planting listening session drew about a hundred farmers and crop insurance agents from North Dakota, South Dakota and Minnesota to Fargo to voice their suggestions about how coverage of the

Federal Crop Insurance

provision could be improved.

The listening session in Fargo had one of the largest turnouts of the hearings held so far, Risk Management Agency staff said. That’s not surprising, because the three states, just in the past few years, have had millions of acres of prevented planting.

In 2022, for example

, there were a total of 4 million prevented planting acres in North Dakota, South Dakota and Minnesota, according to the U.S. Agriculture Department Farm Service Agency. The prevented planting in those states included 2 million acres of corn, 811,357 acres of soybeans and 727,251 acres of wheat.

Prevented planting coverage

is available for 37 crops grown in the United States and covers situations where conditions make it impossible to plant by the RMA planting deadline for a crop in a given area. RMA is gathering feedback on possible changes to the coverage through a request for information published in the May 23, 2023, Federal Register and at listening sessions.

The Fargo listening session was one of 14 the Federal Crop Insurance Corporation

scheduled across the United States

this summer, starting in June, to hear from people about how prevented planting could be improved, while preserving the integrity of the program. The agency also held a virtual listening session in June. The final sessions will be held this month.

The agency’s listening sessions focused on prevented planting payment calculations of harvest price and contract price, the “1 in 4” rule, and 10% additional coverage. General comments about prevented planting were also accepted.

Under the existing revenue protection plan, farmers who get their crops planted but have below-average crops are compensated for yield losses using the projected harvest price if it is higher than the actual price at spring planting. The coverage was intended to help farmers mitigate the risk of having to buy out delivery contracts they can’t fill because of production losses.

After the large number of

prevented planting acres in 2019 and 2020

, farmers asked if prevented planting payments, like lost production, could increase with the actual harvest price, the Risk Management Agency said.

The use of the harvest price for prevented planting payments wouldn’t impact farmers most years because it requires both an increase in the harvest price and the prevented planting claim, RMA said.

Statistics from past years indicate that the additional coverage would increase prevented planting payments by about 6%, on average, for the policies with harvest revenue coverage. There would be a commensurate increase in the premiums for the policies.

“We definitely think that should be included,” said Scott Nelson, a Lakota, North Dakota, farmer, and North Dakota Barley Council board member.

Representatives from the North Dakota Corn Growers Association, Northarvest Bean Growers Association and North Dakota Farmers Union also spoke in favor of having an option to use the harvest price.

Nelson also suggested increasing the number of years in the “1 in 4” rule to getting a field planted in one out of the past five or even six years, if there have been presidential disaster programs due to conditions in those years.

“We certainly have multiple years of excessive moisture and rains,” Nelson said.

The “1 in 4” requirement stipulates that acreage must have been planted to a crop, insured and harvested — or if not harvested, adjusted for claims purposes because of an insurable claim of loss — one out of the previous four crop years. The requirement was meant to discourage farmers from planting on land that for consecutive years didn’t produce a crop.

The Federal Crop Insurance Corporation revised the prevented planting insurance provisions to implement the 1 in 4 requirement nationwide in the 2021 crop year.

Northarvest Bean Growers Association supports the 1 in 4 rule, said Joshua Ihry, a Dazey, North Dakota, farmer and Northarvest Bean Growers Association board member.

“It helps eliminate fraud. It helps keep the producers honest,” he said. During weather cycles when there’s excessive moisture, there is typically still an opportunity to plant in one out of four years, he said.

However, while the rule makes sense, it also has the potential to cause problems for beginning producers who are farming land that doesn’t qualify for 1 in 4 coverage because the land wasn’t previously insured, said Carl Schwab, Groton Ag Services crop insurance agent in Groton, South Dakota.

Under current policy, if farmers take on new land that hasn’t been insured in the past four years and conditions aren’t conducive to planting by the RMA deadline, they have to decide whether to plant at all or take the risk of growing a crop without insurance.

Schwab suggested that RMA allow the acreage of small and beginning farmers who are producing crops on land that had not previously been insured to obtain 1 in 4 coverage, but, at the same time, implement that change in a way that the rule wouldn’t be abused.

Conversations with RMA senior staff members who have been at listening sessions across the United States indicate that the 1 in 4 rule generally has been supported, said Marcia Bunger, RMA administrator.

The exception to that is western states where there have been consecutive drought years.

“Some of those folks already have become ineligible because of the ongoing drought,” she said.

Farmers and crop insurance agents at the Fargo listening session, like at other listening sessions across the United States, generally expressed their support for the 10% buy-up option and the contract price option.

The 10% buy-up option — which would allow farmers to receive 10% more payments if they elect to make a higher premium payment — provides revenue to pay for additional costs of prevented planting, including purchases of herbicides, additional tillage and cover crops, Ihry said.

Northarvest Bean Growers Association also supports the provision that would allow farmers to use their contract prices to determine the insurance guarantee.

“We feel that this would especially greatly benefit dry bean growers, where you’re growing a certain type of dry bean that potentially might have a yield drag, but it does have a higher price,” Ihry said.

The North Dakota Soybean Growers Association also supports the use of the contract price, said Justin Sherlock, an association board member who farms near Dazey.

“We feel that offering a contract price would be a good option for the producer,” he said, noting that some farmers raise specialty soybeans, such as food-grade soybeans, under contract.

Bunger, a South Dakota farmer and former crop insurance agent, told the farmers and crop insurance agents at the Fargo meeting that their feedback about the prevented planting provisions was valuable as RMA considers changes in prevented planting provisions.

“As crop insurance evolves and changes, we try to be as nimble as possible,” Bunger said. ”I think it’s in the best interest of all if everyone has good coverage or access to good coverage so Congress isn’t looking at ad hoc disaster assistance.”

The Risk Management Agency will hold its final listening session in Las Cruces, New Mexico, on Aug. 24, 2023. Comments are due Sept. 1, 2023, at regulations.gov. The request for information, including details for submitting feedback, is available on the Federal Register notice:

https://www.federalregister.gov/documents/2023/05/23/2023-10926/request-for-information-and-stakeholder-listening-sessions-on-prevented-planting.

“I think as we receive all of these comments, we are getting some great ideas,” Bunger said.

Whether the suggestions can be implemented will depend on how they affect farmers across the United States as a whole. While a national policy is easier to administer, it’s not always the most beneficial to farmers in specific regions of the country, she said.

After the information from the listening sessions is compiled and made available for public viewing, RMA staff will start working on the prevented planting provisions. The agency will look at common themes and differences and talk to actuaries about what changes are possible, Bunger said.