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USA Rice seeks crop insurance improvements for rice

By Joe Mencer
Chairman, Crop
Insurance Task Force USA Rice Federation
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Crop insurance (CI) has become an increasingly important part of the farm safety net; however, rice remains underserved relative to other staple crops. With CI now serving as the basis for the recently enacted “crop disaster,” or SURE program, and with the advantage of CI being tailored coverage and having no payment limit issues to deal with, the USA Rice Federation has undertaken a concerted effort to improve the CI policies that are available to rice growers. This began in late 2008 by appointing a task force to pursue all possibilities.

The USA Rice CI task force has been meeting periodically to discuss and evaluate options to improve existing crop insurance policies for rice and consider how to develop possible new policies to meet the needs of rice producers. The group will also address the shortcomings with many of the currently available CI options.

Ten to 15 percent drop in 2011?
In its work to improve existing policies, the task force is focused on lowering rates for rice policies and improving insurable yields or actual production histories (APHs) for growers. The expectation is that the rates (and corresponding premiums) should come down for 2011 from 10 to 15 percent, even as APHs improve to some degree.

This, coupled with the enterprise unit discounts that were made available in the 2008 Farm Bill, should help more rice producers buy higher levels of coverage at a more reasonable price, going forward.

Crop margin coverage
The task force is also pursuing two new possible crop insurance products for rice growers.
Engaging the service of a crop insurance consulting and development firm, the USA Rice group is working with the rice industry to develop various concept proposals for possible development, centered on crop margin coverage (CMC). The CMC concept would insure a certain level of margin against potential increases in key inputs (fuel and fertilizer), reductions in price or reductions in yield.

Add-on for downed or lodged rice
In addition to this work, USA Rice Federation is exploring the development of an optional endorsement (an add-on to existing policies) for specific events like downed or lodged rice. We are working with state Extension personnel, actuarial firms and others to build a data set upon which such an endorsement, which would cover the increased harvest costs associated with lodged rice, could be built and submitted to the Federal Crop Insurance Corporation board for approval and development.

As for timing, the downed or lodged rice endorsement, if ultimately worthwhile to pursue, could possibly be made available for the 2011 crop. Because of the more complicated nature of the CMC, it is highly unlikely that it could be available to growers before the 2012 crop.

Opposed to proposed SRA cuts
In addition to the work of the CI task force, USA Rice and nine other agricultural organizations have expressed their concern in writing to U.S. Department of Agriculture Secretary Tom Vilsack on USDA’s proposed cuts to the Standard Rein-surance Agreement (SRA).

USDA has proposed $6.9 billion in additional cuts over 10 years to the crop insurance program. This proposed cut, if enacted, would permanently reduce the baseline for crop insurance programs and the agriculture baseline as a whole in future Farm Bills. The coalition urged Secretary Vilsack “to promulgate an [agreement] that does not undermine the important gains made in crop insurance since...2000, but, instead, further strengthens available risk management protections and broadens meaningful access.”

For more about USA rice programs, visit www.usarice.com.

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