DALLAS — Texas wheat growers will be able to try a new kind of crop insurance this year that protects them against revenue losses, as well as yield losses.
But they must decide quickly–Sept. 30 is the deadline for choosing this new crop insurance. In 1995, Texas harvested 2.8 million acres of wheat and ranked eighth in the nation in wheat production.
“It’s a new approach because it guarantees farmers a stated amount of revenue,” said Ken Stokes, Texas Agricultural Extension Service agricultural economist based in Dallas. “It’s more expensive than traditional policies, but, for the first time, covers losses from low prices, low yields or any combination of the two. Traditional crop insurance policies cover production losses only.”
“Wheat farmers in the High Plains, Rolling Plains and Blacklands should be sitting down very soon with their crop insurance agents to examine this new option against other insurance programs to choose the best product for their situation,” Stokes stressed. “Crop Revenue Coverage (CRC) is an alternative to Multiple Peril Crop Insurance.
“This year’s drought points up the uncertainties of farming and the need to choose crop insurance protection very carefully. If farmers don’t make a change by the end of September, their existing insurance will continue in force, and they won’t have any options to adjust it until next year.”
CRC was approved as a pilot program in Texas and six other states by the Federal Crop Insurance Corporation. It guarantees a minimum revenue calculated using a grower’s yield history, a base price established this August prior to planting and a harvest-time price determined next June.
“While the new farm bill moves farmers toward a more market- oriented system, it reduces the farmers’ safety net,” said Stokes. “However, using CRC to protect revenue, combined with the new farm program, could actually provide a stronger safety net than farmers had with deficiency payments. CRC also can protect and provide a basis for securing production loans and the flexibility to use progressive marketing strategies to increase income.”
CRC’s expansion to wheat has the support of the Texas Wheat Producers Association, as well as the National Association of Wheat Growers, both of which worked to have Texas included in the pilot program.
“This may be just the program farmers want and need,” said Bill Nelson, executive vice president of the Texas wheat growers. “We look forward to working with the Extension Service, private companies and the Office of Risk Management to put forth a good educational program for our growers.”
Other states included in the pilot program are Kansas, Nebraska, South Dakota, Michigan, Washington and parts of Montana. Growers got their first look at this kind of policy last year in Iowa and Nebraska with corn and soybeans when more than 35,000 producers enrolled in those two states.