Crop Insurance for Tilling Native Sod

For those readers in Nebraska, Iowa, Minnesota, Montana, North Dakota, and South Dakota, there is a change in crop insurance if you wish to till native sod and plant an annual crop.

The Risk Management Agency, pursuant to the 2014 Farm Bill, is limiting crop insurance benefits to producers who till native sod and plant an annual crop for the first four years of production.  Native sod is defined as acreage that has never been tilled or land which the producer cannot substantiate has ever been tilled for crop production.  The reduction in crop insurance benefits is for all counties in the states listed above and for production on five acres or more per crop insurance policy.

The above policy goes into effect in Fall 2014.  If you have plans to till native sod, now is a good time to touch base with your crop insurance agent and discuss this and other risk management strategies.

New Crop Insurance Policies for Beginning Farmers

The USDA and Risk Management Agency (RMA) continue to move forward with implementing the crop insurance requirements for beginning farmers outlined in the 2014 Farm Bill.  The RMA has filed its interim final rule which provide the following:

  • New farmers are exempt from paying the $300 administrative fee for catastrophic crop insurance policies;
  • Premium support rates will increase 10% for a new farmers’ first five years of farming;
  • Beginning farmers receive a greater yield adjustment when yields fall below the 60% of the applicable transitional yield; and
  • Allowing the use of yield history from any previous involvement in a farm or ranch operation, including decision making or physical involvement in the production of the crop or livestock.

Crop insurance is a well-honed risk management strategy and one that beginning farmers in particular should seriously consider.  Given the RMA has now increased incentives for beginning farmers to include crop insurance in their risk management plan, now is a good time to seriously explore the options.

The USDA is closed, with a few exceptions.

As you likely know, the federal government shut down as of midnight eastern time.  If you haven’t been to the USDA’s website yet, take a gander and I’ll be right here waiting for your return.

What services are available from the USDAThis chart, if you search for the USDA, outlines what is and is not open.  Of interest to this audience, meat and poultry inspections continue, as does grain inspections, and the loans backed by the Rural Development Division will be monitored.  The Farm Service Agency is shutdown and in operation only for emergency and natural disaster response.   The National Resources Conservation Service is shutdown with the exception of protection of life and property.  The Risk Management Agency is shutdown and no employees will be at their offices.  Market analysis, forecasts, and analysis will not be provided because the Agricultural Statistical Service and Economic Research Service will be closed.

Please keep in mind that the above concerns the government shutdown and as more information becomes available, this post will be updated.  This post does not address the Farm Bill Continuing Resolution which also expires today.  More than the Farm Bill situation Thursday.

Update:  The National Farmers’ Union has a nice rundown of the implications of the shutdown.  Of note:

Farm program payments for crops planted in 2013 would continue after the farm bill expires September 30. However, payments would not be able to be delivered under a government shutdown.

Update 2:  The Wall Street Journal also discusses the implications for farm program payments and market projections, statistics, and analysis.