A news release on Tuesday from USDA’s Risk Management Agency (RMA) indicated that, “[RMA] today announced updated factors for prevented planting coverage that will strengthen the integrity of the federal crop insurance program. The updates were made to address the recommendations of a 2013 USDA Office of Inspector General (OIG) report, and are supported by the data from a subsequent third-party study commissioned at the urging of the OIG. These improvements will ensure that the program continues to be a well-run program that provides a strong safety net for producers.
“Prevented planting coverage provides producers protection if they are unable to plant an insured crop by the final planting date. When adverse weather prevents planting, a prevented planting payment is made to compensate for the producer’s pre-planting costs generally incurred in preparation for planting the crop. These costs can include purchase of machinery, land rent, fertilizer, actions taken to ready the field, pesticide, labor, and repairs. The prevented planting factor is a percentage of the individual insurance guarantee and varies by crop, based on an estimate of pre-planting costs.”
The news release noted that, “RMA reviewed prevented planting factors for barley, corn, cotton, grain sorghum, rice, soybeans and wheat for 2017 as part of an effort to ensure that prevented planting factors most accurately reflect the pre-planting input costs of producers. Today’s rulemaking will improve RMA’s ability to manage the prevented planting factors moving forward. While the prevented planting factors will be reviewed and updated for all crops with prevented planting coverage, these first seven crops are being updated for the Spring 2017 planting season. Over time, the prevented planting factors may go up or down depending upon changes in input costs. RMA will evaluate the effectiveness of the recent changes and modify them as needed in coming years. Below is a table that lists updated prevented planting factors.”
Table From USDA-RMA
The RMA update added that, “USDA works to strengthen and support American agriculture, an industry that supports one in 11 American jobs, provides American consumers with more than 80 percent of the food we consume, ensures that Americans spend less of their paychecks at the grocery store than most people in other countries, and supports markets for homegrown renewable energy and materials. Since 2009, USDA has provided $5.6 billion in disaster relief to farmers and ranchers; expanded risk management tools with products like Whole Farm Revenue Protection; and helped farm businesses grow with $36 billion in farm credit.”
