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Under cover

RMA adds triticale, uninsured third-party damage to crop insurance

August/September 2017
By Trista Crossley


The U.S. Department of Agriculture’s Risk Management Agency (RMA) has rolled out two new types of coverage for the 2018 crop year that will have some farmers sighing in relief: coverage for triticale and relief from uninsured, third-party damage.

Triticale

Sales closing date for fall- and spring-planted triticale for the 2018 crop year is Sept. 30. The new coverage is a result of a private development under the Federal Crop Insurance Act’s 508(h) process and is available in select counties in seven states across the nation. In Washington state, coverage is available in Adams, Asotin, Benton, Columbia, Douglas, Franklin, Garfield, Grant, Klickitat, Lincoln, Okanogan, Skagit, Spokane, Walla Walla, Whitman and Yakima counties. Counties not currently covered will not be eligible to be covered under written agreement, said Ben Thiel, director of RMA’s Spokane Regional Office, which covers Alaska, Idaho, Oregon and Washington.

Triticale is a wheat-rye hybrid. Howard Nelson, manager of member/special services for Central Washington Grain Growers, said most of the triticale grown in Washington state is used in poultry feed. It does have a small but growing presence in the food market where it is used in breads and cereal. In other parts of the country, triticale is popular as a spring forage crop and an overwintering cover crop. According to the National Agricultural Statistics Service in 2012, 5,446 acres of triticale were harvested in Washington state, for a total of approximately 273,000 bushels.

Nelson has been a vocal advocate for crop insurance coverage for triticale. He said triticale does really well as a first crop on previous Conservation Reserve Program land because it has more tolerances to disease. Triticale also matures a little quicker than wheat, does better in delayed planting situations than wheat and is tolerant of low pH soil. It is also stripe rust resistant. Nelson said he expects to see more triticale planted now that it is eligible for crop insurance.

“Before triticale can gain a foothold as a crop, you need crop insurance for protection from natural disasters. Also, most lenders prefer you to grow crops that have some protection. The growth of a crop is limited until you have crop insurance,” he explained.

Thiel said that growers have been advocating for triticale coverage for a number of years and that the lack of coverage may have played a part in limiting the crop’s acres.

“For risk management purposes, people weren’t going to attempt to do triticale except on a very experimental, rotational-type basis. Now, knowing that crop insurance is available for triticale, there probably will be more people growing it and working it into their rotations,” he said.

The triticale coverage is only available for varieties approved for grain production, as opposed for varieties for forage or haying. Coverage will be similar to coverage available for wheat, but growers need to be aware of some differences:

• Coverage is an APH (actual production history) type plan that provides yield protection but not revenue protection;

• There will be a RMA-published price election, but growers with a contract can insure at their contract price;

• There is no winter coverage endorsement;

• Coverage levels will be offered from 50 percent up to 85 percent; and

• There will be some quality protection, with a reduction in value quality adjustment happening when the grain falls below a U.S. No. 2 grade triticale.

Rates and yield will be based off a producer’s APH or county transitional yields. Thiel said premiums are likely to be comparable to wheat premiums. Growers interested in triticale coverage should contact their insurance agents before the Sept. 30 closing date.

“Our main job is to make sure producers are aware that there is a multiperil crop insurance product for triticale. In the past, there’s been a misconception that either the wheat policy covers triticale, which it doesn’t, or that there was an insurance policy that was provided that we’ve never had,” Thiel said.

Uninsured, unavoidable fire/third-party damage

Up until now, farmers who lost a field due to damages caused by a third party got hit with a double whammy. Because such damages are not insurable causes of loss, producers received no indemnity payment. In addition, the loss was reported in the producer’s APH. Beginning in 2018, however, a producer will have the option to not have the production associated with such causes included in their APH database.

“I think everyone accepts that those causes are not insurable, and they don’t get covered for that. But it’s always been unfortunate that on the production reporting side, through no fault of your own, you’ve lost the crop, and it impacts your APH,” Thiel said. “Now, for the most part, when you are faced with that situation and you are looking at the production reporting side, it’s a null. It’s not a zero. There was a crop, you lost it for this reason, but it doesn’t help or hurt your APH going forward.”

Fires caused by combines or passing trains and chemical drift are some of the most common causes of unavoidable, uninsured third-party damages in the wheat industry. Under this new procedure, insurance companies will consider the ignition source and could determine that the producer was not involved. As Thiel explained, the burden of proof is on the producer, and the cause will be verified by the insurance company to make sure the damage was unavoidable.

This procedure will be applied to all crops that are covered under a multiperil crop insurance policy. Most of the Pacific Northwest wheat organizations have been asking RMA to modify this procedure for many years.

“I think the nature of wheat harvest—it’s so flammable. In the Midwest, if something catches on fire, the grass is still green, so it doesn’t go anywhere. But out here, any type of spark can be dangerous,” Thiel said.