New Farm Bill Program for Farmers Affected by Severe Weather

Pursuant to the 2014 Farm Bill, the USDA is implementing a new program for farmers affected by severe weather, including drought.  The Actual Production History (APH) Yield Exclusion, available in Spring 2015 for selected crops, allows eligible producers who have been hit with severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program.

Eligible spring crops are corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn.

The APH Yield Exclusion allows farmers to exclude yields in exceptionally bad years (such as a year in which a natural disaster or other extreme weather occurs) from their production history when calculating yields used to establish their crop insurance coverage. The level of insurance coverage available to a farmer is based on the farmer’s average recent yields. In the past, a year of particularly low yields that occurred due to severe weather beyond the farmer’s control would reduce the level of insurance coverage available to the farmer in future years. By excluding unusually bad years, farmers will not have to worry that a natural disaster will reduce their insurance coverage for years to come.

Under the program, yields can be excluded from farm actual production history when the county average yield for that crop year is at least 50 percent below the 10 previous consecutive crop years’ average yield.

The Farm Bill moves forward and some other notes of possible interest

Farm Bill Update:

The last time we checked in with the Farm Bill, it was nearing passage in the House.  A week later, where are we?

First, the Farm Bill did pass in the House and moved to the Senate.  The Senate is advancing towards final passage of the Farm Bill today.  The linked article also delves into details about the new crop insurance program and the consequences for farmers.  Of note, the Farm Bill is passing with wide bipartisan majorities in both the House and Senate.

President Obama is expected to sign the Farm Bill.

Over the next few weeks, we will explore the new crop insurance programs included in the Farm Bill and the possible ramifications to your operation.

Other Possible News of Interest: