Farmers Still Have Questions About Insurance on Wheat

USDA's Risk Management Agency offers pointers.

Wheat farmers need to contact their crop insurance agent prior to putting failed wheat acres to another use – either haying, grazing or planting to another crop.

That's the word from the USDA Risk Management Agency's Topeka Regional Office.

"It is very important that farmers get their insurance company's consent before taking steps to plant to another crop," says Rebecca Davis, risk management specialist at the office. "The company must have a chance to appraise and release the acres before the crop is destroyed.

If the company and producer cannot agree on an appraisal, they may be able to work out representative strip areas to be left intact for future appraisal purposes.

Producers choosing to leave wheat intact and harvest the crop must care for and maintain the crop, Davis says. With much of the state's wheat in poor shape due to freezing temperatures over Easter weekend, many farmers question how much to invest in a freeze-ravaged crop.

"Farmers may seek advice from ag experts in the area as to what, how much, and when to spray to maintain the production that is currently in the field and protect the crop from further damage," Davis says.

Producers who destroy the crop and leave representative samples must maintain the samples the same as if the entire crop was left. The samples must be maintained until the company conducts a final inspection and releases the strips. Failure to maintain the crop following damage could result in an assessment for uninsured causes, she says.

Planting another crop

Producers who destroy the wheat crop and go to a second crop have the following options after they talk to their insurance companies:

* Plant but not insure a second crop. The policyholder will collect 100% of the indemnity for the first crop after the loss adjuster confirms the loss. Written notice must be provided that the policyholder elects not to insure the acreage of a second crop

* Plant and insure a second crop. The policyholder will collect 35% of the wheat indemnity; the policyholder will pay 35% of the wheat premium. If there is no loss on the second insured crop, the policyholder can request the remaining 65% of the wheat indemnity. However, if there is a loss on the second crop, the policyholder may either waive the indemnity on the second crop and collect the remaining indemnity on wheat (also pay remaining premium), or collect the loss on the second crop and keep the 35% wheat indemnity.

There are a couple of exceptions to this rule, Davis says.

First, none of this applies if the wheat has reached the headed stage at the time it is destroyed and planted to a second nonirrigated crop. In this case, the second crop could not be insured, so the producer would need to keep any production on that crop separate from other acres of the crop.

Second, these rules do not apply in situations where double cropping is an insurable practice. In several counties in Southeast Kansas, insurance is available on double cropped soybeans. If a producer has a history of double cropping soybeans following harvested wheat, both crops would be eligible for a full indemnity.

Producers should read section 15 of their CRC or RA policies (Section 14 if covered under the APH plan) and their Special Provisions of Insurance for further details. For additional assistance, you may contact the Topeka Regional Office at (785) 266-0248.

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