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2014-08-25 SWFP APH adjustment story(the following is an excerpt from the Southwest Farm Press story, Farmers insist RMA has ample time to implement APH adjustment for 2015, posted Aug. 25, 2014. Read the entire story here.)

The Texas Wheat Producers Association continues to take issue with the U.S. Department of Agriculture Risk Management Agency’s (RMA) reluctance to implement the Actual Production History (APH) adjustment as per the farm bill.

In a statement to Southwest Farm Press, TWPA said, “Crop insurance has become the go-to tool for producers, but without important measures like the APH adjustment, the coverage offered doesn’t add up to average production expectations.

“Today, farmers are being penalized because a persistent, one-in-eighty-year drought is included in their ten-year production history. In agriculture, weather disasters are part of the business, but they should not diminish the risk management available through crop insurance.

“Without the ability to exclude terrible yields from disastrous years, a farmer’s APH plummets; in turn, the amount of yield a producer can insure in future years will also drop significantly.

“During debate of the new farm bill, farmers supported changes that shifted emphasis to the crop insurance program. They did so by acknowledging the critical improvements such as the APH adjustment that would bring their crop insurance guarantees back in line with the productive ability of their land.”

Farmer perspective

David Cleavinger, TWPA board member and farmer in Wildorado, Texas, plants an average of 1,200 acres of wheat each year. After multiple years of devastating drought, he has seen his crop insurance coverage erode.

“I haven’t harvested an acre of dryland wheat since 2010,” Cleavinger said. “The drought developed in 2011 and hasn’t let up. It is tough to go year after year without making a crop, especially when I see those yields decimating the most important form of protection I have.

“I ran the figures on one dryland wheat section in Deaf Smith County, and by dropping the yields from three qualifying years, I would be able to increase my APH from 23 bushels per acre, to 28.”

At $6.50 wheat, the adjustment would correspond to $32.50 per acre of crop insurance coverage that he is not eligible for now but that his land is capable of producing under average conditions.

Regional approach

Some have suggested that RMA concentrate on the Southwest—arguably the most hard-hit section in the country over the past four years of persistent drought—for implementation in 2015. In a letter to RMA Administrator Brandon Willis, wheat producers associations in Colorado, Kansas, Oklahoma and Texas implored RMA to concentrate on areas hard hit by recent, persistent drought.

An excerpt from that letter reads: “If it is not feasible to implement these provisions nationwide for the 2015 crop year, we ask that they be implemented for growers in states experiencing persistent drought to provide growers the needed benefits of the new provision while not over-burdening your agency.”

APH implementation still unlikely for 2015

Joe Outlaw, Texas AgriLife Extension economist and Co-director of the Agriculture and Food Policy Center in College Station, sees little chance the adjustment will be ready for 2015.

“Don’t count on it for next year,” Outlaw said. “It’s a contentious issue. As of now, it will not be available for 2015.”

He explained to a group of wheat producers at a conference in Abilene recently that the adjustment would allow farmers to not count any production from a year when county average drops below the 10-year average. “It also allows for separation of dryland and irrigated acreage.

The exclusion would be good for our area of the country with significant drought losses. It is controversial.”

Farmers and their associations agree that the issue does stir up controversy, but they contend that farmers may suffer significant losses from the delay. Some imply that crop insurance companies prefer to push back implementation to avoid the potential higher payments. A Farm Press request for comments from the National Crop Insurance Services was declined.

Read the entire Southwest Farm Press article here.

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The Texas Wheat Producers Association is a voluntary membership organization of wheat producers in Texas. The association provides growers a concentrated, organized voice in political matters affecting the production and marketing of their crops. For more information, visit http://www.texaswheat.org.