What is in this article?:
- Congress takes look at 2011 disasters, crop insurance
- Rice, levees, claims
- House subcommittee hearing focuses on crop insurance.
- RMA head says hes never "seen anything like" widespread disasters in 2011 growing season.
- Says RMA and insurance companies should be able to handle heavier claims load.
Rice, levees, claims
With major rice acreage in his east Arkansas district, Rep. Rick Crawford asked Murphy to provide insight “into differences in participation between crops and/or regions. For example, according to RMA data, about 68 percent of rice acres – particularly in Arkansas – were insured. By contrast, nearly all of Texas’ cotton acres were insured.”
Murphy was “happy to report we’re seeing increases. One of the concerns we often get is between major program crops and specialty. We’re at 83 percent participation in the major program crops and have come up to 75 percent for specialty crops.”
The introduction of the “additional subsidy for enterprise units has also been extremely helpful” Murphy continued, especially in east Arkansas for both rice and cotton. “It reduces the premium tremendously. Growers have flocked to those programs.”
Even so, “Arkansas, Mississippi, Alabama – that area – is where we’re seeing lower participation than other parts of the country. We’re actively working with commodity groups down there to improve the programs. We’re looking at the program dates to make sure they’re the correct (ones) we should be using.”
RMA is “even getting into the policies themselves. We’ve been having great meetings with rice growers and looking at additional coverage the growers would like to see for downed rice. Hurricanes come through the area and they have to deal with the additional costs of harvest. Hopefully, we’ll see progress in the next couple of years.”
Program integrity is “another big issue,” said Murphy. Farmers must be “convinced the premium dollars they’re paying out are only going to legitimate losses. Compliance officers are putting extra effort into that area to show that.”
At the end of the hearing, Murphy again addressed the need to increase rice and cotton coverage. “Rice growers, especially in the central-South, have wells to get their water. They’ll always be able to get water. It’s a perception of risk. They’re big concerns are hurricane and disease. And how often does that occur? It’s all a perception of risk.”
Crawford asked for clarification regarding crop insurance pay-outs in areas flooded following the Army Corps of Engineers deliberately breaching levees along the Mississippi and Missouri rivers.
Murphy said those crop losses are covered. “The Corps provided us with information of what would happen if they didn’t breach the levees – additional damage would have occurred to crops downstream. … (Insurance) companies have been informed and they tell me they’re now moving loss adjusters in to start working with (affected) growers.”
The pressure on RMA and insurance companies to quickly address claims was obvious. “Just about every part of the country is dealing with something (disastrous)” said Murphy in response to a question by New York Rep. Christopher Gibson. “I’ve talked to the companies and they’re very confident that they have an adequately trained workforce. They’re moving people around the country, which they routinely do when addressing situations like this. I do believe we’ll be able to make the (required) 30-day turnaround.”