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USDA Boosts Prevent Plant Payments

Payments will begin in mid-October.

Starting next month, many farmers affected by flooding and planting delays who had crop insurance will get an extra 10% to 15% “top-up” payment in addition to their indemnity payments for prevented planting.

The payments are part of a $19-billion Disaster Relief Act passed by Congress and signed by President Donald Trump last June.

USDA announced the program Thursday. Your crop insurance company, one of 14 insurers known as “approved insurance providers” or AIPs, will send out the extra payments.

“It was a challenging planting season for many of our farmers,” says Bill Northey, USDA’s Undersecretary for Farm Production and Conservation. “We are doing everything we can to ensure producers receive the help they need. USDA is working with AIPs so that producers can receive additional payments as soon as possible and we appreciate the AIPs for helping us help America’s farmers.”

USDA expects the payments to start going out in mid-October.

Farmers don’t have to do anything to receive the payments.

Representative Collin Peterson (D-MN), the chairman of the House Agriculture Committee said in a statement Thursday that he’s pleased with this efficient delivery system.

“As weather continues to throw wrenches into farmers’ plans, both in western Minnesota and across the country, I appreciate USDA and crop insurance providers moving forward in delivering the prevented planting plus-up that Congress provided,” said Peterson. “This will give direct help to farmers without additional paperwork, and allow them to focus on the range of other challenges they face.”

One executive with a large crop insurance company told Agriculture.com that crop insurers still don’t have all of the details about how the program will work.

He expects the payments to last several months. USDA’s Risk Management Agency will calculate the payments based on the indemnity claims submitted monthly by each insurer.

“Not all customers who have prevent plant are going to receive payments,” said the official, who asked not to be named because he wasn’t yet authorized to talk about the program.

For example, those delayed by dry conditions won’t get the top-up payments. He expects many producers in the Midwest to receive them.

The largest payments, an additional 15% of the original indemnity payment, will go to producers who purchased Revenue Protection (which includes what used to be called the Harvest Price Option). The added 10% top-up will go to producers with either Yield Protection or Revenue Protection with the Harvest Price Exclusion.

Crop insurance company websites didn’t have much information posted Thursday beyond the USDA’s press release. Two examples of these company announcements can be found here:

https://www.proag.com/news/proag-participates-in-automatic-prevented-pla...

https://www.rainhail.com/d/ps/

You can also find more USDA information on prevented Planting Disaster Payments at this website:

https://www.rma.usda.gov/en/News-Room/Frequently-Asked-Questions/Prevented-Planting-Disaster-Payments

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