Gov. Nikki Haley wants to expedite crop insurance payments to farmers who were hit hard by last month’s floods.
Agriculture, the state’s largest industry, took a $587 million hit last month when floodwaters ravaged fields at the height of the fall harvest. As a result, state officials are already predicting an increase in farm foreclosures next year.
Haley asked U.S. Department of Agriculture Secretary Tom Vilsack on Monday to expedite crop insurance payouts by allowing affected crops, with no market value, to be deemed losses without farmers having to harvest them at their own expense.
“Any effort to improve the speed and efficiency of programs and services available to farmers will greatly improve South Carolina’s recovery effort and increase the likelihood that each affected small business will be operating this time next year,” Haley wrote.
Farmers were given access to emergency loans through a USDA disaster declaration, but state agriculture officials said last week that many farmers can’t afford additional debt after an already rough growing season before the floods.
“Crop insurance, as we are finding out, was not designed for this type of loss, the scope of this loss and across the spectrum of crops that we’ve seen,” Assistant S.C. Agriculture Commissioner Aaron Wood said last week. “Crop insurance is not the savior that some folks think it is.”
Under the 2014 farm bill, crop insurance changed from guaranteed direct payments to one underwritten by the USDA Risk Management Agency and sold by private insurers. Now farmers are finding out that if they have crop insurance, those payments won’t cover much of their losses.
For example, production costs would be $580 per acre of cotton. Assuming farmers purchased 70 percent insurance coverage, a crop insurance payout would be $330, leaving $250 uncovered — or $53 million if multiplied across the 215,000 acres planted in the state.
Additionally, there are two separate commodity programs that can be triggered if price and/or yields fall below rates administered by the Farm Service Agency. Even still, those payments wouldn’t be available until October 2016.
“They essentially lost a year’s salary this year and have no way to make next year’s salary,” Wood said. “This is a food and economic security emergency in South Carolina.”
Source – http://www.postandcourier.com