WASHINGTON, April 14, 2016 - The 2014 farm bill’s Actual Production History (APH) Yield Exclusion (YE) is available for the first time ever for winter wheat farmers, and it’s turning out to be a popular crop insurance program, according to officials and preliminary internal USDA data.
Winter wheat farmers have enrolled 20 percent of the roughly 28 million acres that are eligible for the program for 2016, according to the data, which was made available to Agri-Pulse.
House Agriculture Committee Mike Conaway, R-Texas, reacted positively to the statistics. “The initial results are encouraging, showing that the yield exclusion is being utilized throughout the United States,” Conaway said.
National Association of Wheat Growers President Gordon Stoner said he would like to have seen APH YE in place for 2015 winter wheat, but is still grateful for the work USDA’s Risk Management Agency is doing now.
The new data, he said in an interview, “indicates that the yield exclusion was an absolutely vital part of the farm program for areas that experienced extended drought. This clearly shows that the farmers were needing assistance where their yields had eroded.”
The winter wheat totals for APH YE signup is a large jump from the roughly 8 percent of eligible spring wheat acres that were enrolled for 2015, and that’s likely due to one of two factors, USDA officials said. There’s the drought, and then there’s also the fact that producers are becoming more and more comfortable with the 2014 farm bill provisions.
Farmers who suffer multiple years of drought often have a hard time getting affordable crop insurance because they are seen as bigger risks by banks. That’s why Congress included the APH YE provision in the latest farm bill.
“The yield exclusion was included in the 2014 farm bill as a way of helping farmers whose crop insurance guarantees have been decimated by widespread natural disasters,” Conaway said. “While farmers have to pay for the additional coverage, the yield exclusion does ensure that their insurance coverage more closely aligns with yields they can reasonably expect to produce.”
A farmer can sign up for the policy if the average yield in his or her county is 50 percent below the county’s 10-year average. It essentially allows farmers to exclude poor performing yields from the production history data that’s used to calculate crop insurance coverage.
“APH YE helps farmers who suffered years of loss (from conditions such as drought) to improve their coverage options to better reflect their production anticipated for that year,” RMA Administrator Brandon Willis said. “We worked hard to get this out for farmers who had suffered years of losses, such as drought. While we were able to provide it in 2015 for major crops, what we are seeing is that the expansion of the program is now helping farmers of winter wheat as well as fruits and vegetables.”
Rep. Frank Lucas, R-Okla., who chaired the Agriculture Committee in 2014, fought together with Conaway that year to get USDA to implement APH YE as quickly as possible. But USDA officials said at the time that they just did not have the time to get it done immediately amid all the other farm bill implementation work.
In October 2014, Agriculture Secretary Tom Vilsack announced that RMA would be able to offer the yield exclusions for spring wheat, corn, soybeans, cotton, sorghum, rice, barley, canola, sunflowers, peanuts and popcorn farmers. But, to the disappointment of Lucas and Conaway, Vilsack said RMA could not implement the yield exclusion program in time for winter wheat and some other crops.
“It’s just a fact of the calendar,” Vilsack said at the time. “Winter wheat election was made prior to Sept. 30. This was not a situation where we could make this announcement soon enough to impact winter wheat.”
A year later, though, farmers were signing up for yield exclusions on millions of acres of winter wheat, and the APH YE provision is now available for 50 different crops, including some that may come as a surprise, RMA officials said. About 40 percent of the 38,765 insured acres of prunes planted in the U.S. qualified for APH YE in 2016, as well as 21 percent of the 5,729 eligible acres of tangelos.
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