BLOOMINGTON, Ill. — When it comes to taking the Prevent Plant option on crop insurance, where does a person even start?
“There are numerous options and that’s why I think it’s important for them to start doing the homework now and to start crunching those numbers,” said Doug Yoder.
Yoder is a crop agency manager for Country Financial, based in Bloomington, Illinois.
While farmers cannot file Prevent Plant claims yet, Yoder said the day before they intend to file is not the time to start deciding what options best fit an individual’s situation.
“You don’t want to wait until crunch time to start the homework and learn about this and then start calculating,” Yoder said.
This spring has seen a continuing parade of weather events, from snow to ice to torrential rains and flooding, as well as cool conditions to go along with all that water, that have kept farmers out of the field throughout the Midwest.
“I’ve had numerous conversations with farmers who have been around a long time and they are telling me this is the first time they’ve ever had to consider this. Obviously, they are learning about some of these rules around Prevent Plant for the first time,” Yoder said.
One of the ways that this round of Prevent Plant claims could be different and more difficult for farmers is due to a combination of factors that happened just recently that may play into farmers’ decisions.
“We have some brand new, unique situations nobody has gone through before, such as the Market Facilitation Program. That didn’t occur until September, so it could not impact planting decisions last year,” Yoder said.
However, with a second round of trade aid recently promised by President Donald Trump, to help make up for financial losses suffered due to the ongoing trade war with China, some considerations may need to be made for that program, even though it hasn’t been rolled out as of May 18.
“I think farmers need to at least consider — if we do get a package and it’s structured similar to last year, they won’t get the payment if the ground is left fallow. They have to have the bushels in order to qualify for that payment,” Yoder said.
But if the second round of trade aid is structured like the U.S. Department of Agriculture’s direct payment program, that won’t be an issue.
“We are also hearing that the House and the Senate ag committees are considering switching the structure this year to where it would pay of Actual Production History yield, not existing production for this coming year. That would, obviously, be a step in the right direction because that would not influence planting decisions,” Yoder said.
Another rule to remember concerns the Supplemental Coverage Option that many farmers purchased for the first time for the 2019 crop.
“This year, in between the two farm bills, a lot of farmers were able to purchase SCO coverage for the first time. They need to make sure they realize that extra coverage is not eligible for Prevent Plant and only their base coverage on the base policy is, so that extra coverage does not qualify for extra Prevent Plant coverage,” Yoder said.
Farmers who have forward-contracted bushels should also take into account their obligations.
“If they’ve done any forward contracting of grain, let’s say to an elevator or a processor and if they are considering Prevent Plant claims and leaving the ground fallow, then they may not have enough bushels to fill those contracts and they may need to consider will they need to buy those contracts back from the elevator or processor and what will that cost them,” Yoder said.
If farmers do decide to take Prevent Plant, they should file their claim as soon as it is possible to do so, so adjusters can start work on that claim and talk about all the options available with the farmer.
“That final plant date is really important. If they can’t plant by then, then it is a Prevent Plant. After that final plant date, if they haven’t planted and they don’t think they are going to be able to plant, is to file that Prevent Plant claim immediately, so we can get an adjuster out there and look at their situation and talk about the different possible scenarios that they may have,” said Nyle Wiechmann, crop claims supervisor for Country Financial.
Farmers also need to include the prevent plant acres on their initial acres report.
For Indiana and most of Illinois, except the southernmost counties, the final planting date for corn for grain is June 5. For those southernmost Illinois counties, the final planting date is May 31.
For soybeans not following another crop, June 20 is the final planting date in all of Indiana. Illinois has two final planting dates for soybeans not following another crop, June 15 in the northern third of the state and June 20 in the remaining two thirds.
“RMA requires two things — a timely-filed claim for Prevent Plant and then on their initial acres report, when they are filling that out, that they put those prevent plant acres on that initial acres report. If they don’t do both of these things, they could jeopardize having a payable Prevent Plant claim,” Wiechmann said.
Knowing the final plant dates for corn and for soybeans for their county is imperative.
“They are different in different areas throughout the state. They need to confirm what county they are in, they need to confirm the final plant date for the crop within that county,” said Brad Clow, crop operations manager for Country Financial.
Filing too early can mean a penalty.
“The RMA prohibits any Prevent Plant claim being submitted prior to the final planting date so they do have to be conscious of the dates and make sure they do not submit that Prevent Plant claim until after the final plant date,” Clow said.
One concept of Prevent Plant that may be misunderstood is that the situation has to be the same for neighboring crops in an area.
“An example would be if you have four farmers on surrounding corners and a farmer in the middle. The farmers on the surrounding corners are all able to get their crops in, the one in the middle is unable to get his crop in,” Clow said.
At that point, adjusters step in to document the farm and the conditions that prevent the farmer from planting, including photos and weather reports.
“The problem that could come of that is, if we were able to get the claim through, we thought we had everything documented, we made the payment. RMA may come back and take a look at the information and disagree with our position, which would then put us in a position where we would have to get the money back from that client,” Clow said.
There is a deadline to file for Prevent Plant. Farmers have 72 hours after the late planting date for the crop in their county.
“If they file any later than that, RMA says it is not acceptable, so they do have a deadline,” Wiechmann said.