Farmers in the Lower Rio Grande Valley find themselves between a desert and a dry place as they contemplate planting 2006 spring crops.
They are suffering through a multi-year drought and have lost crop yield the past two years because of dry conditions. Most are covered by multi-peril crop insurance that will pay for “prevented planting.” But that coverage comes with a catch. Prevented planting compensates for only 50 percent of the elected coverage on cotton and 60 percent for grain sorghum. And by the time most farmers realize they will not be able to plant these crops they already have as much as 85 percent of their production costs (not counting harvest expenses, which are not covered) in the ground.
Adding to the dilemma, if farmers plant in what they think will be a futile effort at making a profitable yield, they may qualify for the total coverage but in the meantime will destroy much of their land by plowing it and leaving it vulnerable to the highly eroding winds that typically occur in the spring.
Several farmer production associations are asking the Congress to enact a special provision to enable the Risk Management Agency to allow payment of an additional 35 percent of elected coverage.
“Our dryland producers would prefer not to plant in such a hopeless situation,” Webb Wallace, executive director of the Cotton and Gain Producers of the Lower Rio Grande Valley, wrote in a letter to Texas Sen. Kay Bailey Hutchinson. “But federal crop insurance rules require the actual planting of seeds into the field in order to qualify for the maximum coverage. Growers are therefore forced to plant, regardless of how hopeless the situation is, to qualify for the full indemnity.”
Wallace pointed out that the Valley also begins its first full year in the Texas Boll Weevil Eradication Program this year. Consequently, farmers who plant cotton, regardless of whether it makes or not, are required to pay eradication fees ($14 pre acre). The Foundation also has to monitor the field all season, even if it fails. Wallace also pointed out that failed cotton acreage likely will have volunteer cotton emerge early next winter, providing refuge for surviving weevils.
“Currently, no dryland farmland in the LRGV has any stored moisture and only farmland in the extreme eastern portions of Willacy and Cameron Counties has barely enough moisture to germinate seeds of grain sorghum or cotton,” Wallace said.
Ray Prewett, Executive Director of the Texas Fruit and Vegetable Association and Citrus Mutual, also is contacting legislators on behalf on cotton and grain producers.
“The farmers in our area are being severely penalized by a crop insurance program with inadequate coverage,” he wrote, “because yields have gone down for several years due to adverse weather conditions. Even if we carry a crop to harvest in a normal year our crop insurance will not cover production costs.
“But this drought has brought on a much bigger problem. Our soil type is mostly sandy loam. With this severe drought our land is on the verge of blowing out on a large scale. And yet for the farmer to collect full indemnity he must plant his crop. This will in turn make matters much worse. The soil erosion will be unstoppable until there is significant rainfall and not just an inch or two.”
Prewett explained that farmers will occur upfront production costs whether they plant or not and cites Texas A&M agricultural economics department estimates showing grain sorghum farmers in the area applying more than 82 percent of total production costs before they plant. Again, that does not include harvest expenses.
“Here is our recommendation,” Prewett said. “We are asking Congress to make disaster payment of 35 percent of the prevented planting coverage on top of the normal prevented planted coverage. This 35 percent supplementary payment would bring us to 81 percent of the costs we have already incurred prior to planting this crop.
“Most importantly, this supplemental payment would give producers the incentive not to plant. This is a win-win for the farmer and the Risk Management Agency (who) would have reduced total indemnities.”
Prewett said unless farmers have an incentive not to, they will be forced by economic realities to plant to be eligible for full crop insurance compensation. Planting under prevailing conditions, he said, will result in severe soil erosion.
Prewett said supporting documentation from both the Natural Resources Conservation Service and the Farm Service Agency supported the request.
Both Prewett and Wallace said farmers need answers within two weeks.
“We've already been battling high winds this year,' Wallace said. “Soil likely will be further degraded by the passing of a plow.”
Prewett said this request offers a unique solution to a potentially devastating problem. “Most disaster programs are approved and implemented after the disaster is over and when the damage is fully known and highly visible. In our case, waiting until after we plant will be too late to prevent the disaster. The act of planting will dramatically magnify the impending disaster.”
He said acting now to prevent disaster makes more sense.
Prewett said no one can predict with any certainty that disaster will unfold. “We would like nothing better than to get enough rain to plant and grow a crop. That's what we do best. If we were to get adequate rain in a timely manner and we are able to plant under conditions where we have a reasonable chance of making a crop, we would be more than glad to forego the 35 percent supplemental payment.
“We do not want to make our living from a disaster program, but we need to know in the next two weeks that, if we do not receive sufficient rain in a timely manner, we will be eligible for a reasonable payment for not planting.”
“The impact of this drought are becoming clearer every week,” Wallace said.