Big yields and less than desirable weather patterns are creating a stressful situation for cotton producers across the High Plains region.
A big part of their concern is how to get the crop that's in the field harvested in a timely manner. A side issue that some have questioned is how these high yields will be treated when they are fed into the Federal Crop Insurance Actual Production History database.
Rumors and misunderstandings have already begun to surface regarding how higher than normal yields are treated within the Federal Crop Insurance program.
The biggest concern that exists is the mistaken impression that yields are automatically capped for purposes of the APH database, regardless of the fact that he producer has verifiable evidence that a higher yield was produc ed.
Plains Cotton Growers has discussed this issue with USDA Risk Management officials to determine exactly what procedures come into play when reported yields are greater than what is considered normal by virtue of past production in an area.
The main purpose of the yield verification procedures used by RMA is to identify and correct data entry errors, and to identify potential instances of fraud.
RMA personnel have been following the progress of the crop and have a good understanding of the yield levels that will be added to the APH database in 2004.
PCG was pleased to note that the agency is also willing to look at modifications within the data acceptance system to accommodate the higher yields. These changes, once enacted, will also keep the additional workload associated with verifying flagged yields to a reasonable level that assures accuracy and prevents abuse. Insurance companies are responsible for verifying the yield information reported by producers.
Under normal circumstances yields are automatically flagged for company follow-up and verification when they exceed two times the amount of the T-yield in the county in which the crop was produced. When this situation occurs the company is asked to verify the yield is correct and entered into the system correctly.
Should a reported yield exceed four times the County T-yield, the field is also flagged for verification by the company with the additional requirement that the findings be reported to RMA for final approval before being included in the database.
With the additional yield prospects that exist on the High Plains RMA is evaluating how much these two trigger levels will need to be increased to better reflect the average production values that will be seen in 2004 but still provide adequate follow-up on yields that exceed the higher parameters.
To keep the verification process from becoming a bigger headache than it needs to be, producers and insurance providers are encouraged to head off potential problems by keeping production and yield evidence up to date. It is possible that some 2004 non-irrigated production could be 6-8 times the County T-yield and require some level of verification by the company.
The good news is that once they are verified, they will go into the APH database “as-is” regardless of how much they exceed the County T-yield.