USDA moves ahead on APH updates

Farm bill allows yield adjustments for figuring crop insurance when losses are widespread and beyond the control of producers.

The U.S. Department of Agriculture said it would update Actual Production History (APH) adjustments for the 2015 spring-planted crops, an about face on an issue of vital importance to states who have faced droughts and widespread losses in recent years.

Two of the biggest proponents for the APH change were House Agriculture Committee chairman Frank Lucas (R., Okla.) and Rep. Mike Conaway (R., Texas) who had repeatedly called on the USDA to make the changes. However, USDA and Secretary of Agriculture Tom Vilsack had continually said they did not have the time or funds to roll out the changes until after the 2015 crop year.

The Actual Production History (APH) Yield Exclusion, available nationwide for farmers of select crops starting next spring, allows eligible producers who have been hit with severe weather to receive a higher approved yield on their insurance policies through the federal crop insurance program. Spring crops eligible for APH Yield Exclusion include corn, soybeans, wheat, cotton, grain sorghum, rice, barley, canola, sunflowers, peanuts, and popcorn. Nearly three-fourths of all acres and liability in the federal crop insurance program will be covered under APH Yield Exclusion.

USDA said its Risk Management Agency and Farm Service Agency staff worked hard to implement several 2014 Farm Bill programs ahead of schedule, such as the Agricultural Risk Coverage, the Price Loss Coverage, Supplemental Coverage Option and Stacked Income Protection Plan. USDA is now able to leverage data from the Agricultural Risk Coverage and Price Loss Coverage to extract the information needed to implement APH Yield Exclusion earlier than expected.

“The APH adjustment means everything to farmers all across the country who have suffered through year after year of devastating drought conditions,” Lucas said. “It is the difference between having viable crop insurance for the coming year or not.”

The APH Yield Exclusion allows farmers to exclude yields in exceptionally bad years (such as a year in which a natural disaster or other extreme weather occurs) from their production history when calculating yields used to establish their crop insurance coverage. The level of insurance coverage available to a farmer is based on the farmer's average recent yields. In the past, a year of particularly low yields that occurred due to severe weather beyond the farmer's control would reduce the level of insurance coverage available to the farmer in future years. By excluding unusually bad years, farmers will not have to worry that a natural disaster will reduce their insurance coverage for years to come, USDA explained.

Under the new Farm Bill program, yields can be excluded from farm actual production history when the county average yield for that crop year is at least 50% below the 10 previous consecutive crop years' average yield.

USDA said RMA will provide additional program details in December 2014.

Lucas said he remains “hopeful” that USDA will also work to make the same relief available to winter wheat producers.

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