Saturday, July 12, 2014

Yields on Lake Woebegon Farms

By definition, the farms around Lake Woebegon normally have above average weather.  And "around" extends to the 48 states, at least.  The question really is, whether "normal" should include below average years.  At one time we used "Olympic averaging" in ASCS--tossing the highest and lowest years and using the remaining ones.  But there's always pressure from the field and from Congress to recognize that we live in Lake Woebegon, and that applies to crop insurance as well as the old disaster programs of the 1970's.

From yesterday's Farm Policy:
A news release yesterday from Chairman Conaway stated that, “[Chairman Conaway] called on the Agriculture Department to implement the Actual Production History adjustment in 2015. The adjustment was part of the 2014 Farm Bill and allows farmers to prevent harvest years that are affected by severe weather from having a negative impact on the calculations determining their crop insurance coverage. ‘There are farmers and ranchers who have experienced severe drought for three years,’ Congressman Conaway said. ‘Many remain in severe drought this year. A good many of these areas are in D-4 drought condition. Despite all of this, we understand the department intends to administratively delay APH relief until 2016, the THIRD year of a FIVE year farm bill. I respectfully urge the department to respond to this natural disaster in states like Texas, Oklahoma, New Mexico, Colorado and other states around the country with the same speed and determination as one would expect in the case of a wildfire or a hurricane.’
“While Under Secretary Scuse did not commit to implement the provision earlier than the fall of 2015, he did commit to go back and investigate and provide the committee with detail about potential timelines, and even consider a partial implementation for areas and crops most impacted by drought and losses in the farm bill.”

1 comment:

Anonymous said...

This is another one of those things that gets more complicated the more you consider the possible ramifications. Unfortunately there are a few farmers out there that "farm" the insurance programs, so you have to watch out for that. Then, like you mention, what is normal? During some time periods, drought has been the norm. Media and politics also play a big role. As Conway alludes to, a hurricane draws more attention than a drought. Part of the problem is a drought is passive and affects farmers and ranchers more than people in urban areas.