Agroinsurance

USA - An Economic Assessment of Crop Revenue Insurance

Revenue protection for crop insurance is commonplace in the United States and is emerging in other markets around the world. In the U.S., about 80% of crop insurance policies are categorized as revenue protection; that is, the farmer is paid an indemnity based on the difference between what their actual farm revenue is versus the revenue that the farm could potentially earn had prices or yields not fallen. In effect, the insurance offers protection from production risk due to natural perils, such as weather and disease, as well as the price risk as a result of turbulent commodities markets. In order for revenue insurance to have a viable place in the marketplace there has to be a few prerequisites. As with all crop insurance, data needs to be available for calculating the expected yield distribution, for calculating the farm’s expected yield and determining the probability distribution of indemnity payments and the size of those payments. The naïve view would be that one also needs historical data for calculating probability distribution of prices since revenue = prices*yields. However, historical data on price distributions are seldom enough to properly account for the risk of insuring the price component of revenue insurance. When oil is trading at $30/barrel, it would be silly to insure based on the average price of the past 5 years (~$100/barrel). The same is true for commodity crops whose prices go through cycles of boom and bust. Another problem is that historical price volatility is not a reliable measure of volatility for purposes of calculating revenue insurance premium. Therefore, revenue insurance programs based solely on historical data are fundamentally flawed. In order for crop revenue insurance to be viable, there needs to be an unbiased way of calculating expected future prices and expected future volatility. Fortunately, these two things are exactly what well-functioning commodities futures markets provide: an unbiased estimate of the future price and the implied volatility from the commodity futures options market. The unfortunate part is that futures markets are only well-functioning in certain regions for certain crops. From the futures market there might exist an unbiased estimate for the price of corn in the Midwest in September, but we do not know what almonds in California should fetch in the future because there are no contracts traded for almonds. That suggests that revenue insurance for corn farmers in Iowa is possible but not for almond farmers in California. Contrary to the above, revenue insurance products not based on well-functioning commodity futures markets do exist in the marketplace. However, the industry needs to be mindful of the shortfalls in providing revenue insurance products without well-functioning commodities market providing information about the underlying price risk. If the insurer’s expectation of price is higher than the farmer’s, the farmer might over-insure. If the insurer’s expectation of price is lower than the farmer’s, the farmer might under-insure or not purchase insurance at all (let’s call this the value misjudgment). Likewise, if the insurer misjudges the volatility of prices, the rates will either be too high or too low for the risk. Farmers often have a better sense of the expected price and expected volatility than insurers (let’s call this the rating misjudgment). Actuaries might look to rating these policies based on historical ‘as-if’ analysis, but this type of analysis will fail to capture the participation differential for periods when the farmer judges that the price/risk tradeoff is favorable. When the farmer judges it to be unfavorable, the insurer may end up underwriting more policies that have a higher likelihood of producing claims (let’s call this the participation misjudgment). This type of information asymmetry exists in many types of insurance, where a great deal of effort is spent dealing with adverse selection (e.g., only people of poor health purchase health insurance). Some solutions are to sell to groups instead of individuals so that the average risk is known even if individual risks are not. In crop insurance, price impacts everyone to a similar degree and insuring groups does not reduce the value misjudgment or the rating misjudgment. However, the market might think about averaging over time instead of averaging over individuals in a group so that periods of overestimating price/volatility risk and underestimating it are canceled out. In practice, it is very difficult to have crop insurance contracts span a significant period of time due to changes in crop types, size of fields, etc. from year to year. Another possible solution is to insure many crops instead of individual crops so that the risk is averaged out. This would be a good solution if crop prices were not highly correlated; yet data tend to show that commodity prices are becoming more correlated over time not only among crops but also between all commodities. Even if crop prices were not highly correlated the uneven sales of policies from year to year, the participation misjudgment, would still occur. To provide revenue insurance for crops without sufficiently liquid commodity futures markets is a challenge. Even when there is a sufficiently liquid commodity futures market, price risk is non-diversifiable for the insurer since corn prices in Iowa are most likely going in the same direction as corn prices in Indiana. Reinsuring price risk may be one solution but, in general, non-diversifiable risks require special attention from risk managers. An innovative approach would be to become the market maker in these risk markets. A corn price rise is beneficial for corn farmers but causes pain for consumers of corn, such as livestock producers or ethanol plant operators. There are natural gains from trade if price risk from one industry can be easily transferred to another with the opposite risk profile. As the market for offering price risk and revenue insurance matures, it becomes incumbent upon the insurance industry to seek innovative solutions for reducing risks that farmers and agricultural firms face, but must always do so with a view toward the long-term viability of the product in mind. Source - ironshore.com

Mexico - Rains and cold may affect Colima's plantain

According to the forecast of the National Weather Service, it might rain in Colima this week; something that the leader of the National Peasant Confederation (CNC) in Colima, Jorge Armando Gaytan Sanchez, deems could affect plantain producers the most. "Hopefully it won't rain so the flowers set well. The rains would affect plantain producers the most, as they are only starting to recuperate from the previous rains," said the leader. Gaytan Sanchez said that the atypical rains in January this year had mainly delayed the flowering of lime and mango trees. "The lime blossom was a little affected. Hopefully the rains will arrive in season until summer and they won't affect the production of mango and citrus, which are in full bloom," he said. Finally, he said mango and plantain crops were sensitive to low temperatures, so they would be affected if the temperature decreased to 13 or 15 degrees Celsius. "Plantain would turn brownish, and that would hurt us as the market doesn't buy plantain with these characteristics," he said. Source - freshplaza.com

Australia - New multi-peril player enters fray

A NEW competitor has entered Australia’s growing multi-peril crop insurance (MPCI) market. Horsham-based SureSeason Australia is aiming to take on $60 million worth of risk across the country in its first year, with its products being underwritten by global insurance giant Lloyd’s. SureSeason director Darryl McCrae said he believed the product was unique on the Australian market. It will provide pay-outs against all perils based on a projected in-season revenue calculated on the farm business five year averages. In its pay-out methodology, it is similar to other products, but Mr McCrae said a painstaking product planning process in conjunction with the farming sector meant it offered a range of initiatives not currently available on the market. For example, he said farmers could have flexibility surrounding their level of cover. “At present, most products offer one level, or at most two, of cover, but within our product, a farmer can nominate the level they like, with the premium adjusted to reflect that.” Another new offering will be links with agronomy businesses, with Ruralco a referring partner of the SureSeason concept. “We are keen to target the top echelon of Australian farmers and we think we have a product that will suit,” Mr McCrae said. He said insurance would be available on all crop commodities, not just cereals and canola as with some other products. It is also relevant against a range of perils. “Obviously drought is a big one, but we want to be able to offer protection against all perils not caused by the operator,” Mr McCrae said. For instance, he said damage from pests and fungal disease would also be insurable. The Achilles Heel, according to the production sector, for MPCI products in Australia, is generally price. Mr McCrae said growers could tailor that price according to their individual needs. “I tell them it will range from the price of a summer spray program to the price of an application of Sakura (a selective herbicide).” This equates to a range between roughly $12/ha and $35/ha. Mr McCrae said the company aimed to write policies across the country. “Geographic spread is important to us.” Source - farmweekly.com.au

USA - USDA Offers Protections for Noninsured Crops Against Weather Losses

In agriculture, opportunity is often created from overcoming challenges. So when I hear people say “work for the best and prepare for the worst,” it is the American farmers and ranchers who come to mind because they characterize the optimism and resilience of the very concept, especially when it comes to overcoming severe weather. And although many farmers and ranchers carry insurance on their crops and livestock, insurance isn’t always available for everything that can be grown or produced. For example, with many specialty crops, like vegetables and fruits, or floriculture, nursery, or livestock forage, private insurance for losses from weather damage may not be available. That’s why the USDA’s Farm Service Agency (FSA) offers help to producers through the Noninsured Crop Disaster Assistance Program (NAP), which provides financial assistance to producers of noninsurable crops when low yields, loss of inventory, or prevented plantings occur due to natural disasters. NAP has existed for 21 years; for the majority of that time, it provided only catastrophic coverage for losses of more than 50 percent of expected production. That catastrophic coverage – still available – pays 55 percent of the average market price. Today, not only does NAP provide a safety-net for specialty crop producers working to make healthy fruits and vegetables available to more consumers, the program also covers aquaculture, turf grass, ginseng, honey, syrup – and even organic and energy crops. Higher levels of coverage are available for losses up to 65 percent of production and 100 percent of the average market price. Basic coverage fees are $250 per crop or $750 per producer per administrative county, whichever is less. No producer pays more than $1,875. In fact, for beginning, traditionally underserved, or limited resource producers, the catastrophic coverage is free, and premiums for higher levels of protection are discounted by 50 percent. For spring planted crops in Wisconsin, the deadline to apply is March 15. I encourage farmers of all types to visit an FSA office to learn more about the Noninsured Crop Disaster Assistance Program. Source - doorcountypulse.com

India - Government may provide market-linked insurance for plantation crops like tea and coffee

Government is likely to initiate a market-linked insurance scheme for plantation crops such as tea, coffee, tobacco and rubber to help growers tide over the impact of price and yield fluctuations. The revenue insurance scheme for plantation crops, an official said, will be launched once the operational parameters are finalised by the government. It would be implemented on a pilot basis in 7 districts and will provide insurance cover against fluctuation in prices and yield, the official added. The scheme will be funded from the price stabilisation fund for plantation crops. The price of these crops are sensitive to developments in the international markets. Besides, natural calamities too impact the productivity of these crops. According to a Commerce and Industry Ministry report, these crops are grown in about 16 lakh hectares and they provide direct employment to about 17.10 lakh workers. Though the plantation crops occupy only about 1 per cent of the total cropped area, they generate about 15 per cent of the total agricultural export earnings. The report has also stated that the growers of plantation commodities are vulnerable to large risks in terms of production caused by adverse climatic conditions, as also to price risks caused by demand and supply situations and changes in domestic and international prices. "The plantation crops are traded in an extremely competitive international market, which causes enhanced vulnerability in times of severe price drop. Cartelisation and indirect subsidies in international markets further increase price risks," it had said. On the other hand, India needs to remain a credible supplier in the global market for which price stability is an essential consideration. India is the largest producer and consumer of black tea in the world. It is the sixth largest producer of coffee and 4th in natural rubber production. The country is among the largest producers and exporters of tobacco in the world. Source - economictimes.indiatimes.com

Philippines - Agri damage due to El Niño hits P1.9 billion

In a report the DA released yesterday, a total of 134,321 metric tons (MT) of crops have been affected as of Mar. 7 by the dry spell. The El Niño has damaged a total area of 91,027 hectares tilled by some 62,267 farmers. The El Niño is a phenomenon triggered by the unusual warming of the Pacific Ocean. Rice crop areas were hit the hardest, with total production loss valued at P1.191 billion. Damage to corn and high-value crops was valued at P700.944 million and P8.092 million, respectively. The livestock sector has reached P11,477 million in damage. On provinces, Region XII recorded the largest crop damage valued at P639.016 million. This was followed by Region X and VI with crops hit by the El Niño reaching P358.403 million and P356.560 million, respectively. The Philippine Atmospheric Geophysical and Astronomical Services Administration (PAGASA) has warned as early as last year that the current El Niño can last longer than what occurred from 1997-1998. In its El Niño Advisory No. 13 posted on its Web site on Tuesday, PAGASA said that “climate models suggest gradual weakening of El Niño” until May. Earlier, DA Secretary Proceso J. Alcala said the agency aims for rice production to reach at least 18 million MT this year. In January, the Philippine Statistics Authority projected that “based on standing crops,” rice production in the first quarter could decline by 4.98% to 4.15 million MT, from the 4.37-million-MT output in the same period of 2015. To address the impacts of El Niño, the government has allotted P979.90 million through the General Appropriations Act of 2016, though the DA is seeking an additional P2.11 billion. As part of its interventions, the government has provided hybrid seed varieties, which can boost average yields by 20%-35%, and conducted cloud seeding operations to hard-hit areas. From Jan. 12 to Mar. 6, the DA has conducted 146 cloud seeding sorties totalling 184 hours, with a 68% success rate in prompting light to intense rainfall. Source - bworldonline.com

Serbia - Declares Emergency after Regional Floods

The Serbian Interior Ministry declared an emergency situation on Monday in the flood-affected Cacak, Lucani and Arilje municipalities. There were also landslides caused by the deluge in the Bajina Basta municipality, where several homes were submerged and roads damaged. In Preljine near Cacak, where about 80 millimetres of rain per square metre fell overnight, the River Cemernica broke its banks, resulting in the evacuation of 15 people, Emergency Situations Sector chief Predrag Maric said. Matic also said that water levels were rising in major rivers elsewhere in Serbia, but that serious problems were not expected there. “We contacted the Serbian Army to get involved, and prepared if necessary to evacuate people,” he said. He said that the Kosjeric, Arilje and Cacak municipalities saw flash flooding, but had been forewarned on Friday that this might happen. The River Bjelica flooded and shut down the road from Lucani to Guca and the the road from Guca to Cacak. Meanwhile in Guca itself, the Milan Blagojevic factory, the local healthcare centre, a hospital, a school and the main power station were all flooded. In Pozega in western Serbia, heavy rain caused flooding from streams and rivers, although the extent of the damage was not known on Monday morning. The Hydro-Meteorological Institute warned on Sunday evening that Serbia could expect a further downpour ranging from 20 to 40 millimetres of rain per square metre on Monday in southern, central, and eastern areas, and that road traffic could be disrupted as a result. In May 2014, the country was hit by series of floods affecting 39 out of 120 municipalities, forcing more than 30,000 people from their homes and damaging or destroying roads, railways, bridges, homes, power plants and telecommunications infrastructure. The floods came after heavy rainfall and a powerful cyclone that swept through the central part of the Balkan Peninsula. Obrenovac, a small town south of Belgrade, suffered the most from the floods. A damage assessment report adopted by the government in July 2014 put the total cost of repairing the damage at about 1.5 billion euros. This included the damage to homes, infrastructure, agriculture and educational and other facilities. The authorities said 485 houses were completely destroyed by the deluge and 12,000 hectares of land became usable for agricultural production in the following season. Source - balkaninsight.com

Is Satellite Imagery Better Than Drone Imagery?

Jesse Vollmar, CEO of FarmLogs, recently addressed the question of whether or not satellite imagery is better than drone imagery. He outlined six reasons why he believes satellite imagery trumps drone imagery in agriculture. 1. Less time needed to acquire a signal. “A satellite has the ability to capture imagery for all of your fields in very little time. A drone can take over an hour to cover a single field,” says Vollmar. 2. No stitching required. “Satellites can provide imagery for an entire field in a single image with little distortion,” he says. “Aerial drones currently have a 500 foot height flying restriction. The result is drone imagery captures only fractions of the field and often with distortion.” 3. Imagery is georeferenced. When an image is georeferenced, it means that each pixel in the image has been processed to accurately represent the actual spatial relationship between two or more objects in that image. “So let’s say you purchase a drone that produces imagery that’s not georeferenced,” explains Vollmar. “It means that the relationship between your fields, your farm, various landmarks, etc. will appear distorted.” 4. No special license or training needed. “Users of satellite imagery don’t need a special license or training to use it,” he says. “Currently, the FAA sees all ag drone activity as a commercial use. What that means is in order to fly a drone, you must have a Section 333 Exemption from the FAA to fly. You’ll also need a pilot’s license.” 5. Quickly spot seasonal field patterns. “Satellites have been quietly taking snapshots of your land for years,” says Vollmar. “FarmLogs tools provide insights and recommendations using real-time images in addition to six collective years of historical imagery of your fields.” 6. More cost effective. “It wasn’t always cost effective for farmers to access satellite imagery of their land,” he explains. “But because FarmLogs has partnered with Planet Labs, we’re now providing satellite imagery to growers across the country for as little as 20 cents per acre or less.” Source - agriculture.com

Iranian melons expected to flood Bulgarian market

Iranian watermelons are expected to flood the Bulgarian market in the summer, as their price, taking logistics costs into account, will be really low, predicts Alexander Yotsev, board member of the Bulgarian Industrial Association and executive director of the Union of food business operators in Bulgaria. The import is expected to start long before the Bulgarian production is ripe, because of the warmer climate in the Asian country, he warned. Iran is one of the world's top three watermelon producers. The country has a highly developed agriculture, with growers receiving higher subsidies for their products. The symbolic price at which they are sold may allegedly be a way to prevent accusations against Tehran for the product's dumping on the continent. Earlier this year, the European Union removed the economic sanctions against Iran, which had been imposed because of the country's nuclear program. Thus, access to European markets has eased, so we should expect not only cheap watermelons, but also all kinds of fruits and vegetables thriving in subtropical climates, said Yotsev. This will be yet another hit for Bulgarian melon and watermelon producers, who were already affected by cheap imports from Greece. Many local growers have already discontinued the production, because it is labour intensive and revenues are steadily falling. Agricultural statistics show that, about ten years ago, watermelons were planted on 48,014 acres and melons on 22,675 acres. In 2014, however, Bulgaria's watermelon acreage has dropped to 28,610 acres and the number of acres devoted to melons has dropped by more than 4 times, down to a symbolic 4,820 acres. Furthermore, yields are also 38% lower. Source - expert.bg

Ethiopia - Hapoalim leads $200m finance for Netafim project

The corporate division of Bank Hapoalim (TASE: POLI) has led a deal of over $200 million for the Ethiopian government's sugar company to finance a huge irrigation project by Israeli company Netafim Ltd.. The project covers 7,000 hectares (17,500 acres). The finance will be provided as buyers' credit, fully guaranteed by the government of Ethiopia, in tranches against milestones in the project, and will be transferred directly to Netafim as payment for exports. The government sugar company will repay the credit over 9.5 years, and the repayment risk is insured by a consortium of insurance companies that ilcudes Ashra Israel Export Insurance Corp. Ltd. and international insurance companies with high credit ratings. Netafim is a world leading company in smart irrigation solutions for sustainable agriculture. It has 28 subsidiaries, 17 factories, and some 4,300 employees around the world. It supplies to over 110 countries. The company is managed by Ran Maidan and is controlled by European private equity firm Permira and Kibbutz Hazerim. In the current project, Netafim will supply an end-to-end solution from engineering design to the supply of infrastructure for drawing and transporting water, advanced irrigation systems, and control systems, and including agronomic and engineering consulting by the company's experts from Israel and elsewhere. The sugar cane will be irrigated using advanced subsurface drip irrigation, which has been proven to boost crop yields substantially while saving water and other inputs. The work will start immediately and will be spread over this year and next. Netafim CEO Ran Maidan said, "This is a large international agricultural project, and a strategic project that strengthens Netafim's business in Africa in general and in Ethiopia in particular. Netafim was selected to lead the project because of its proven ability to supply advanced end-to-end solutions for large and complex projects, while advising the customers at all stages. Netafim will lead the project together with Baran Group and Global Africa Industries Group, led by Itai Terner. We thank Bank Hapoalim with which we worled and which haleped us greatly in creating an overall solution to enable the project to go ahead. We are sure that this project will be a success, like similar projects that Netafim has carried out in India, South Africa, Brazil, and Peru." Source - globes.co.il

India - Impending rains pose a risk to rabi harvest

After two back-to-back deficient monsoons and a warm and dry winter, India Meteorological Department has warned of heavy unseasonal rain and hailstorm in 14 Indian states, which could pose as a threat to the Rabi harvest. The rainfall which is expected to hit the states between 11 and 15 March will be caused by an intense western disturbance currently lying over Iran. The states that are likely to be affected are: Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Punjab, Haryana, Delhi, Rajasthan, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Maharashtra, Bihar, Jharkhand and West Bengal. Over the past week, winter crops of wheat, chickpea and mustard have suffered some damage in pockets of states like Maharashtra, Madhya Pradesh, Uttar Pradesh and Rajasthan. While rainfall in monsoon was 14% below average last year, winter rainfall has been 57% below average. “The western disturbance will bring copious amount of rainfall and we have advised farmers to take actions to protect their crops. But there is not much they can do to protect wheat and cereal. There are still some measures that can be taken to protect fruit crops,” said N. Chattopadhyay, deputy director general of the agricultural meteorology at IMD. Some of the measures suggested for farmers include early harvesting of mature crops, keeping harvested produce in safer place and use of hail nets/hail caps to protect orchards from damage. Farmers in 15 states bore the brunt of unseasonal rain in March and April last year—just ahead of the winter harvest—which led to a 7% drop in wheat production in 2014-15 (compared to the previous year) and damaged crops of pulses, whose production fell by nearly 2 million tonnes. What’s worse, the freak rain was preceded by a drought in 2014, when the June to September southwest monsoon recorded a deficit of 12%. This was followed by a second drought in 2015 which saw a 14% deficit in rainfall and as many as 10 states declaring drought. Weather woes showed up in plummeting growth rates—the three consecutive crop failures resulted in a 0.2% decline in agricultural output in 2014-15. In 2015-16, the sector is expected to clock 1.1% growth, but the freak rain as predicted by the government forecaster might dampen this further, protracting the long period of rural distress. “The main Rabi crop in northern India is wheat and mustard. While normal rainfall will not be harmful to wheat, accompanying wind and hailstorm can be damaging both for wheat and mustard,” said Brajesh Jha, associate professor, agricultural economics unit, Institute of Economic Growth. “After last year’s monsoon failure, this could significantly damage farmer income and adequate support from the government and crop insurance are crucial to take care of farmers’ needs,” added Jha. Source - livemint.com

Australia - Irrigation options help Mowanjum grow

THE Mowanjum Pastoral Company, near Derby, has been granted an option to expand its irrigation activities which will allow it to dramatically expand its cattle numbers. The West Kimberley Aboriginal Corporation company plans to develop an irrigation precinct, feedlot and related infrastructure with the option for freehold tenure. The Mowanjum irrigation plan is part of the Water for Food Land Tenure Pathway for Irrigated Agriculture project funded by Royalties for Regions. Mowanjum is a 55,000 hectare pastoral lease which has grown its cattle numbers from about 250 head a few years ago to almost 2000 head. It aspires to dramatically increase herd numbers. For the first time since 1982, the company sold 200 head of cattle into live trade in 2014, and has continued to trade into the live export market through Wyndham. Water Minister Mia Davies said the success of a recent Water for Food irrigation trial at Mowanjum station demonstrated the potential to further develop irrigated agriculture in the region. "The trial showed the suitability of soils at Mowanjum for irrigated agriculture and that the corporation has the capacity to run intensive cattle operations on the station," Ms Davies said. "This will pave the way for further investment and growth in the West Kimberley." She said the station had grown its herd since the trial and expects to export about 200 Brahman cross bulls through Wyndham this year. "They have also struck a partnership with Pardoo station in the Pilbara," Ms Davies said. "They are agisting 690 cattle on the station." The cattle comprise weaners and heifers, and the station is using centre pivot irrigation to grow fodder. Lands Minister Terry Redman said the corporation could proceed with its plans. "The project will deliver significant economic and social benefits to the West Kimberley region," Mr Redman said. "The development of irrigated agriculture at Mowanjum station will boost employment and training opportunities for Aboriginal people, promote greater social engagement and financial stability for the local community and open the door to new export markets.'' "Royalties for Regions is investing in strategic initiatives to support WA's agricultural industry to ensure our regions remain sustainable for future generations." The Water for Food scheme is a four-year project that will see $40 million of Royalties for Regions funding used to identify water and land resources and irrigation technologies that could increase the contribution of WA's fresh food and animal protein production to regional economies by at least 50 per cent by 2050. In 2014, the first stage of $15.5m was allocated to the West Kimberley region, including $3.6m to establish an irrigation trial at Mowanjum station. Source - farmweekly.com.au

Peru - Organic banana exports on a halt due to floods

Northern Peru has been severely hit by heavy rains in recent days, which have caused many floods throughout the region. 5,000 hectares of crops have been seriously affected after the overflowing of the river Tumbes, with organic bananas, rice, lemon, cocoa and fruit trees as the most affected crops. "A flood of this magnitude had not been recorded since 1998. Despite the preventive measures enforced by both the Ministry of Agriculture and the producers, it has not been possible to reduce the damage," explains Raúl Villa, spokesperson of APPBOBA (Association of Small Producers of Organic Bananas of Brujas Alta). Given that the area is mostly devoted to the production of organic bananas, the export of this Peruvian product has stagnated and the situation won't change for a few weeks. It has been forecast that the rains will stop on 15 March; by that time, it will be possible to determine the extent of the losses and the date when production will resume. "We hope to be able to continue growing and marketing our organic bananas soon and that the consequences of phenomena such as El Niño are not repeated," concludes Raúl Villa. Source - freshplaza.com

USA - S.C. farmers need a helping hand

We understand Gov. Nikki Haley’s philosophical objection to singling out South Carolina farmers for special aid following a disastrous 2015. But without help, many farmers could go out of business, and that would be a significant blow to the state’s economy. South Carolina farmers say 2015 ranks among the worst years ever for them. The S.C. Department of Agriculture reports that farmers suffered $587 million in losses last year, with $376 million the result of the destruction of nearly the entire cotton, soybean and peanut crops. And with continuing wet weather and lower commodity prices, 2016 could be just as bad. Nature was not kind to the state’s agriculture industry last year. Farmers first had to contend with a hard freeze in late March. That was followed by a midsummer drought that hit much of the state. And that was followed in October with storms that flooded parched crops, leaving fields in low-lying areas covered in up to two feet of water. With heavy rain pelting the state periodically through the fall and winter, the ground still is muddy, making it impossible for many farmers to plant a new crop, which could result in millions more dollars in losses. South Carolina farmers have received federal crop insurance payments from the U.S. Department of Agriculture, and they have access to emergency low-interest loans. But farmers also had hoped the state would use some of the federal flood-relief money to cover a portion of their uninsured crop losses. While Haley requested $140 million in federal aid for flood relief for homeowners, she didn’t ask for money for farmers. She said farmers already enjoy protections through federal crop insurance and they shouldn’t expect special treatment that is unavailable to other businesses. But farming always has been different from the average business. We reward farmers for enduring the uncertainties of trying to plant and harvest a crop because agriculture is regarded as a necessity to the nation’s well being. We realize that many huge farming enterprises are immensely profitable, well protected from the ups and downs of weather cycles and recipients of generous subsidies from the federal government. But many smaller farms are one bad year away from bankruptcy. Last year, with both a drought and a flood, was such a year for many of the state’s farmers. And 2016 is certain to be a challenging year as well, testing the staying power of many smaller and family farms. Agriculture is a mainstay industry in this state. That is especially true with the growing emphasis on farm-to-table enterprises and the effort to promote the consumption of state-grown produce and meat within the state. Failing to help sustain the agriculture industry could mean that not only will many farmers go out of business but also that many potential young farmers will decide to look for another line of work. That would be bad news for the poorer rural parts of the state where farming remains a vital part of the local economy. The state routinely provides tax breaks and other perks to businesses that agree to locate in South Carolina. We should be just as attentive to the needs of farmers who already contribute substantially to the state’s economy. Source - heraldonline.com

India - State seeks Rs. 1,742-crore drought relief from Centre

Days after a Central team visited drought-hit districts and assessed the crop situation, two ministers from the Siddaramaiah Cabinet will visit New Delhi on Thursday to prevail upon the Centre for early release of grants for drought relief works. Revenue Minister V. Srinivas Prasad and Agriculture Minister Krishna Byre Gowda will meet Union Minister for Agriculture Radha Mohan Singh and seek immediate disbursal of Rs. 1,742 crore aid in view of the State facing crop loss due to drought even during the Rabi season. Disclosing this in Mysuru on Tuesday, Mr. Prasad told reporters that the 10-member Central team had assessed the crop situation recently. “The drought situation the State is experiencing is the worst in 40 years. I call it unprecedented and farmers are in a state of crisis,” he said. The loss due to crop failure in the Kharif season too was severe and therefore, the Centre was asked to grant Rs. 1,540 crore for drought relief works, Mr. Prasad said. He said the Centre had released Rs. 1,300 crore, and though the assistance came late the money was used for relief works. “The State effectively used the funds and the deputy commissioners were asked to ensure there was no misuse of funds,” he said. To a question on waiver of farm loans, Mr. Prasad said, “That is not possible as the loan amount is around Rs. 10,000 crore and the State is not in a position to consider waiver. The Chief Minister has already made his stance clear.” However, he clarified that there won’t be a severe water crisis in rural areas. “If the sources have dried up, the authorities must supply water through tankers. No matter how much money is spent, people should not go thirsty in the summer,” he said, adding that he had recently instructed deputy commissioners to ensure this. He also said the State Cabinet reshuffle was the prerogative of the CM and the high command. “I don’t know whether it will happen after the budget session,” he said. Source - thehindu.com