Georgia farmers struggling to nurse their crops through
another drought can take heart
that a new law will help protect them against future crop
failures.
Beginning with crops planted this fall, the $8.2 billion
Agricultural Risk Protection
Act will give farmers better crop insurance at lower costs.
Payouts could begin Sept. 1.
The ARPA, signed into law June 20, reforms the federal crop
insurance program. It
protects growers against losses from harsh weather and volatile
markets.
Should Help Georgia
Farmers
“The reforms should prove beneficial to many of the
state’s crop farmers,”
said Don Shurley, an economist with the University of Georgia
College of Agricultural and
Environmental Sciences.
“Many details of how the reform will actually work aren’t
yet known,” Shurley
said. “But it’s clear the intent of the legislation is to
reduce the cost of
insurance and improve its benefits.”
For example, a farmer who would pay $34.50 per acre for
65-percent coverage with no
federal subsidy now pays $20 per acre. Under the reform act, the
premium would drop
another $6 to about $14.
More Coverage, Less
Money
“The increase in the federal subsidy also means farmers
can increase their
coverage for less money,” Shurley said.
The new program will let farmers insure up to 85 percent of
their actual production
history (APH). The top level now is 75 percent.
“The crop-insurance reform package also includes
revisions in how a farmer’s APH
is calculated,” Shurley said.
“This should be very beneficial, especially to
nonirrigating producers, given the
poor growing conditions of the past three years,” he said.
“If a farm suffers a
drought, for example, the farm’s APH can be calculated using 60
percent of the long-term
county average yield or the actual farm yield, whichever is
highest.”
Losses in Quality
Covered
The reform that covers losses in quality will help Georgia
cotton farmers.
“We expect the new rules to make it easier for farmers to
qualify for insured
losses due to low grades,” Shurley said. “Right now, if
the price received falls
below 85 percent of the market price due to low quality, then
the
loss in income is
covered.”
The reform bill also details how $7.1 billion in
already-budgeted aid will be
distributed to growers suffering from another year of extremely
low prices.
Crackdown on Waste, Fraud,
Abuse
The bill includes measures to strengthen the crop insurance
program. It directs the
Secretary of Agriculture to better coordinate U.S. Department of
Agriculture agencies’
investigations of waste, fraud or abuse claims.
Rep. Saxby Chambliss (R-Ga.) said he is pleased with the
flexibility the reform brings
to crop insurance.
“No longer will our farmers be forced to protect their
crops with a
one-size-fits-all program,” Chambliss said. “This new
… flexible coverage
addresses the diversity of Georgia agriculture, rewards good
farming practices and
provides better protection from weather and markets.”
