A Focus on Crop Insurance
As burley tobacco farmers it is time we face the fact that the abuse of crop insurance plays a big factor in our oversupply condition.
In 2013 extreme weather conditions resulted in the loss of crops across the state and the filing of 7,000 bale claims in the Tobacco Administrative Grading Service (TAGS) Program that growing season. Yet, in 2014 when weather conditions improved and the tobacco fields flourished there were over 60,000 bale claims in the TAGS Program, and an extraordinary high percentage of bales that were of inferior quality and marked as NOG.
Over $56 million was paid out to farmers in indemnity payments in 2014, accounting for 17.8 percent of the income from the 2014 burley tobacco crop. This level of abuse, whether intentional or not, has to end.
Representatives from the Council for Burley Tobacco and the Burley Tobacco Growers Cooperative Association (BTGCA) met with the USDA Risk Management Agency (RMA) in Kansas City in early August to discuss crop insurance issues. This meeting was a positive step in helping to address issues that could threaten the long-term viability of crop insurance program for tobacco.
At the meeting it was established that the following changes will take place in the crop insurance program for the 2015 growing season:
Accountability of the graders: The RMA assured there will be renewed efforts to address the lack of oversight and accountability of the tobacco graders under the leadership of the new supervisor.
Traceability of the tobacco through the entire process: It was determined the best way to begin efforts on traceability would be to add the Farm Serial Number to each bale of tobacco graded, plus all graded tobacco must be weighed on a certified scale. This information would be clearly marked on the bale along with the grade. TAGS will inform the grower when scheduling this will be required.
The other crop insurance issues discussed at the meeting include:
Establishment of a final harvest date
Guarantee nondescript tobacco would be destroyed
Tie loss history to individuals/farms not counties
Adoption of an optional enterprise unit for tobacco and raise the level of coverage to 85%
Establish a crop insurance price election based on the cost of production with both a pre-harvest and post-harvest price election
Eliminate insurance coverage for non-contract tobacco
Add requirement to certify barn storage at FSA
We plan to build upon the progress made in Kansas City at an upcoming meeting with USDA Risk Management Agency and Agricultural Marketing Service compliance representatives this fall
We can no longer take the position, “if I grow it there will be a market.” We have to recognize that the market is changing. The demand for burley is not going to come around as it has in the past, and we must change our production practices. We must continue to step outside of our comfort zone and work with policy leaders, health advocates, and industry leaders to identify what the future will be for the burley tobacco farmer.
I hope you will take time to voice your concerns and ideas to me and the other Council for Burley Tobacco board members as we continue to work toward improving the crop insurance program. Visit our website at www.councilforburleytobacco.com and become a member to be a part of the conversation.