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Farm Bill Disaster Program Dependent on Crop Insurance Coverage

According to Jan Eliassen, a consultant that specializes in risk management education, says that what farmers do in the short-term when it comes to crop insurance can have a huge impact on next year.

"Any producer who wants to eligible for disaster assistance on his 2009 crops; corn, soybeans, whatever you grow next year; you must have crop insurance coverage on all your insurable acres on your fall planted crops," says Eliassen.

Most fall crops such as winter wheat, rye and barley have a crop insurance deadline of Sept. 30, which is fast approaching. If producers do not have crop insurance on all fall planted acres they will not be eligible for disaster aid under the Farm Bill's Supplemental Revenue Assistance Program, known as SURE, on any crops next year.

"The more crop insurance coverage you have, the more your SURE guarantee will be," Eliassen says. "They're basically trying to create incentives for people to buy higher levels of crop insurance coverage."

In the event of a disaster, the amount of crop insurance will determine how much a producer is eligible for under SURE. According to Eliassen, a disaster declaration of your county or a contiguous county will automatically make you eligible for the program.

"It can also be any farm where during the calendar year the total loss of production on that farm because of weather is greater than 50% of normal production on the farm," Eliassen says. "So there's a lot at stake and I'm just hoping producers all over the country get the fact that this Sept. 30 deadline has a huge bearing on your eligibility for disaster assistance next year."

Basically, any insurable crop must be insured and any uninsurable crop needs to have coverage under the Non-Insured Assistance Program through the Farm Service Agency.

"The rules have not yet been published, so there are some gray areas out there," Eliassen says. "If you get to one of those gray areas that's not covered; is it an insurable crop or should I get NAP coverage on that, at that point you need to contact your local FSA office and ask them for help."