If organizers of recent Risk Management Producer Meetings in Waco and McKinney, Texas, expected docile crowds interested in just listening to reasons why insurance payments on aflatoxin contaminated corn from the 2005 crop and assessing damage on the 2006 wheat crop have been slow, they got a surprise.
Farmers in both the Southern and Northern Blacklands want answers and they want them quickly.
Sam Cameron, senior risk specialist with the Risk Management Agency in Oklahoma City, Okla., found the crowd in McKinney respectful but insistent that answers be forthcoming — especially regarding a wheat crop that had too little moisture to germinate properly and may have had too little cold weather to vernalize and make grain.
Some growers reported that wheat did not emerge until the first week of February. Others reported spotty stands, varying growth stages and overall poor chances for making a crop.
Texas A&M Extension specialists say much of the wheat will not make it and recommend destroying what's up as soon as possible to preserve moisture for any alternative crop (corn, soybeans, cotton or grain sorghum) farmers may plant.
Growers asked for RMA guidance on how to treat wheat that's up to a late stand. One grower asked if he took the grain to harvest but invested no more money in fertilizer or crop protection, would insurance penalize him for not following, “recommended production practices.”
Texas A&M Extension wheat specialist Gaylon Morgan said much of the wheat would not make profitable yields and that Extension recommendations would be to eliminate or pare back on inputs. “Vernalization (chilling hours) is an issue,” he said. “With a lot of the wheat in this area it's very iffy if it will produce grain.”
“Document that,” Cameron told growers, “and RMA will consider the Extension recommendation as a good farming practice.”
Farmer Ken Griffin said varietal differences affect vernalization, as does germination timing. He said some of his wheat emerged following an October rain. Some of that later died and some fields show varying stages of stand and maturity. “It's a wreck,” he said.
Cameron said decisions on the 2006 wheat crop will be made after March 1. That's too late, according to growers who say if they plan to plant alternate crops they need to know now if the wheat crop will be “zeroed out,” partially paid or if they can accept 35 percent of the insured value and get another crop in the ground.
Northern Blacklands farmer Eric Adkins said the confusion over what will be considered a good farming practice, timing for assessments, and payment rates underlines the need to have more farmer input in crop insurance policy.
“We need decisions immediately,” he said. “I need to be in the field on March 1.”
“This is a decision that makes or breaks me,” said another grower.
Jack Norman, another Northern Blacklands farmer and current president of The Texas Wheat Producers Association, asked if the process could be speeded up if growers can document losses with Extension expert recommendations. “We need a definite answer,” he said.
Cameron said the policy likely could not be changed.
Norman told Farm Press, however, that other information indicates that RMA will look at speeding up the process with adequate documentation accompanying a proposal from the Texas Wheat Producers Association.
“We're pulling that together,” he said.
Cameron said growers who do not agree with the insurance adjuster's assessment of crop damage may destroy the crop but leave strips (10 feet wide) in each field. At normal wheat harvest time, the adjuster determines if the wheat made grain and then sets a value on payment.
The 10-foot swath represents a big chunk of some fields, growers said, and one asked if that stipulation could be changed to allow narrower strips.
Cameron said the policy on strip size was clear and likely would not change. “It's the same across the country,” he said.
Rodney Mosier, executive director, Texas Wheat Producers Board and Association, illustrated how dire the situation is for many farmers.
“Our latest crop report show wheat at 18 percent of normal, compared to 80 percent this time last year,” he said. “The report shows only 1 percent rated good and just 10 percent fair. But 32 percent rates poor and 57 percent very poor. That means 85 percent of the Texas wheat crop falls in the poor to very poor range,” he said.
Rachel Meyers, director of producer and legislative affairs for The Texas Wheat Producers Board and Association, said the organization is working with Texas and Oklahoma legislators to seek economic assistance. “We're making progress,” she said.
Growers also quizzed Cameron on different coverage criteria for drilled wheat and wheat planted broadcast.
“We consider broadcast more risky,” Cameron said.
Farmers insist, however, that broadcast seeding in the Blacklands area may not be as risky as drilling.
“We often have a very narrow window to plant,” Norman said. “And using an air seeder allows us to hit that window. In many cases, farmers who use air seeders make better yields than those who drill.”
Farmers also noted that drilling in seed comes with its own set of problems, including low seeding rates and improper planting depth. They argued that any farmer who wants to fleece crop insurance could do so just as easily with drilled wheat as with broadcast. “But we're just trying to make the best crop we can,” one grower said.
Cameron advised growers to use their associations to push for rule changes.
Corn farmers also complained about the slow response to claims on aflatoxin contaminated corn from the 2005 crop.
“Aflatoxin was a national issue in 2005,” said David Gibson, executive director of the Texas Corn Producers Association.
Insurance settlements remain an issue. One grower said he made a claim in August and did not receive payment until February. “And the insurance company charges me interest if I delay paying the premiums but they pay nothing on the money they hold for six months.”
Gary Rhea, Risk Management Partners, a marketing and consulting firm, said one insurance company has more than 200 claims it has not yet settled.
“We need some kind of deadline on insurance companies to settle claims in a timely manner,” he said.
He said policy changes are needed to improve testing procedures, assure accurate testing for farmers with on-farm storage facilities, and to improve claim assessment consistency.
“Consistency is a crucial issue,” he said. “The only option farmers have if claims are delayed is arbitration and that requires a $2500 fee per claim. That's why we need to force a reasonable time deadline on settlement.”
He said conflict of interest rules, which bar insurance agents from assisting in claim adjustments, should be changed. “Farmers need someone knowledgeable working with them” he said. “Rules are too confusing.”
He said growers also need a fair method of assessing the value of aflatoxin corn.