The Biden administration is working on new ideas to increase crop production this year, including getting Congress to eliminate the penalty for planting after a prevent-plant insurance claim, Agriculture Secretary Tom Vilsack said Monday.
The Agriculture Department also is working on administrative changes to crop insurance and the conservation programs to induce farmers to increase production of wheat and other crops, Vilsack told Agri-Pulse, acknowledging that the president’s original proposals for boosting crop production this year had run into opposition on Capitol Hill.
The administrative changes include expanding the number of counties where double cropping is insurable and allowing landowners with expiring Conservation Reserve Program contracts to start preparing the acreage for planting before Sept. 30 when the contracts end.
USDA also is looking at making winter wheat plantings eligible for conservation programs where farmers are supposed to plant a dedicated cover crop.
“We're trying to create as many concepts and ideas as feasible and possible in the time we have, so that farmers have the ability to make some decisions for themselves,” he said.
Offsetting the prevent-plant penalty would likely be the most controversial. Farmers normally receive only 35% of their prevented-planting indemnity if they plant a crop on the same land that year.
Vilsack said USDA is working with Congress to include funding in the Ukraine supplemental spending bill to offset that penalty.
“An incentive … to make up for this reduced indemnity might get more acres planted,” Vilsack said. He said USDA has been providing lawmakers with technical assistance on the idea.
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The idea is going to face criticism that it could undermine the crop insurance program.
"The underwriting rules for prevented planting were established because yield losses increase dramatically the later one plants past mid- to late May. Moreover, by eliminating these rules you encourage moral hazard problems that could increase indemnities even more. And remember that the costs of the program are shared by companies" through their reinsurance agreement with USDA, said Joe Glauber, a former chief economist for USDA who is now with the International Food Policy Research Institute.
President Joe Biden proposed a $33 billion Ukraine aid package April 28 that proposed raising marketing loan rates for several commodities and providing a $10-an-acre crop insurance incentive to farmers who planted soybeans after a winter wheat crop.
The marketing loan expansion turned out to be too expensive once the Congressional Budget Office scored its cost, and critics said the double-cropping incentive would have relatively little impact on acreage. The American Soybean Association estimates the double-cropping incentive would increase wheat plantings by 37,000 acres and soybean acres by 35,000.
“What we were able to do was to actually stimulate quite a bit of conversation,” Vilsack told Agri-Pulse. “I think we're seeing Congress become interested in exploring possibilities. Some of the things we suggested may not work.”
Vilsack didn’t provide a timetable for when USDA would carry out the administrative changes.
He also said he didn’t have an estimate for much the various incentives could increase plantings.
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