USDA Update

By Rod Johnson

February 27, 2004

The FSA Office has seen some staff changes in recent weeks. Due to Federal budget issues, we were required to separated both of our temporary employees, Carla Warman and Shawn Kelley. Both of these ladies did a fine job for us and were a big help in getting Crop Disaster and 2004 advance payments issued. We will definitely miss them. We have another County Operations Trainee in the office that will be here 6 weeks. Her name is Jean Myrom and she comes to us from Sterling where she has been employed by FSA for 26 years. After her training in four different counties, she will be eligible for a County Executive Director position with FSA. Jean is the 31^st Trainee that has come through Kiowa County since we became a training county in1978.

March 15 is the deadline to purchase Noninsured Crop Disaster Assistance Program (NAP) coverage for several 2004 crops. Crops such as forage sorghum, dual purpose grain sorghum, oats, spring wheat, all millet (except Prosso which is now insurable through Federal Crop Insurance), soybeans and many other crops which are not insurable through Federal Crop Insurance. Cost of coverage is $100 per crop, maximum of $300 per county and $900 for all counties. Final dates to purchase coverage for continuous cropped winter wheat, native grass, alfalfa, rye, fall canola and winter triticale have already passed.

If one crop fails, there are rules on insurance coverage for a second crop on the same acreage. If you want to receive full indemnity payment on the first crop planted you are not eligible for crop insurance coverage on a second planted crop. A major concern we have is the requirement by FSA for "linkage", which is the requirement to purchase crop insurance or NAP coverage for producers who received 2001/2002 Crop Disaster Program payments on crops that were not covered by Federal Crop Insurance or NAP. Failure to obtain required coverage in two subsequent years can result in producers needing to refund 2001/2002 disaster payments.

The following is only one example of several possibilities of the interpretation of the new Federal Crop Insurance and NAP rules. If a producer received a 2001/2002 Crop Disaster payment on grain sorghum that was not insured, there is a requirement to purchase crop insurance for grain sorghum in two subsequent years unless grain sorghum is not planted. If in 2004, the producer has failed wheat acreage that is replanted to grain sorghum, and the producer elects to take full Federal Crop Insurance indemnity on the initial crop of wheat and forgo insurance on the grain sorghum, this will be a violation of the linkage requirement. The fact that the producer elects not to insure the grain sorghum, DOES NOT make the grain sorghum a NAP crop. Purchasing $100 NAP coverage for grain sorghum does not solve the problem unless the planted grain sorghum qualifies as dual purpose which is not insurable by Federal Crop Insurance.

There are different ways to avoid a problem with linkage requirements. Options for the above example are as follows: 1) Take a reduced wheat indemnity and insure the grain sorghum, 2) Not plant grain sorghum on the failed wheat acreage, 3) Plant grain sorghum on the failed wheat acreage as long as some grain sorghum is planted as an initial crop on other acreage that would be insurable, 4) Plant dual purpose grain sorghum that would be eligible for NAP coverage, 5) Plant the failed wheat to some other NAP crop, 5) Summerfallow the failed wheat acreage and replant to wheat in the fall.

This is just one example but there could be other issues with other crops depending on the time of year the first crop fails. Please make sure you pay close attention to this issue. A return to adequate precipitation would sure make life easier for everybody!