Insuring crops a popular practice

Ray Mueller
Now Media Group


The most recently available numbers for the 2015 federal crop insurance program are that more than $5 billion has already been paid on claims, farmers paid nearly $4 billion in premiums and the federal subsidy was more than $6 billion.

More than 90 percent of the insurable farmland in the United States — about 297 million acres encompassing 120 different crops — is covered by that insurance program. The total liability for crops insured during 2015 was approximately $102 billion, down from $110 billion in 2014.

Those numbers were pointed out by Investors Insurance Services agricultural insurance agent Kyle Salter at an information meeting for farmer clients of Investors Community Bank, which has more than $998 million in agricultural loans. Investors Insurance, which is a wholly owned subsidiary of the bank, has customers in more than 40 counties in Wisconsin.

Wisconsin statistics

During 2014, crops in Wisconsin accounted for about $2.6 billion of the $110 billion in potential liability, Salter said. For that year, more than 5.4 million crop acres in Wisconsin were insured, and farmers were paid $283 million in indemnities for either production or revenue losses.

By crop in Wisconsin for 2014, the insurance covered 3.1 million acres of corn with a total liability of $1.6 billion, 1.4 million acres of soybeans with a liability of $535 million and 391,094 acres of forages with a liability of $158 million, Salter said.

Through hail insurance provided by private companies at rates they set, farmers obtained another $1.6 billion in liability protection for 2014, Salter added. He explained that hail insurance also covers losses due to wind, excessive rain, drought, fires and local transporting of harvested crops.

Policy adjustments

Salter cited several recently available options for maximizing one's level of coverage that must be elected by the sales closing date (March 15 for most crops). They include a county-based yield trend adjustment formula, a yield exclusion privilege for taking a bad crop year out of one's production history and a combination of the trend and yield adjustments.

The 2014 Farm Bill also requires that conservation compliance requirements be met in order to be eligible for the federal subsidy on crop insurance. Those not complying can obtain insurance by paying the full premium.

Another requirement to avoid scrutiny is to be consistent on the names and numbers in the all documents provided to the Farm Service Agency, the U.S. Department of Agriculture, the Internal Revenue Service and the Risk Management Agency, that administers the crop insurance program.

Spring 2015 procedures

Reminders for crop insurance procedures for the spring of 2016 are that any established alfalfa fields need to appraised by an adjuster before the crop stand is destroyed whether a first cutting is taken or not and that coverage on policies for new forage seedings expires on May 21.

Having an adjuster's appraisal is also required for any insured winter wheat that is to be terminated. The insurance agent needs to be informed if the intent to grow another insured crop after the destruction of the wheat crop.