The drought of 2012 had a significant impact on most growers across the nation. But while commodity farmers of crops like corn, wheat, and soybeans were able to write off their crops before the harvest was even upon them, vegetable growers haven’t been so lucky.
As of mid-October, $2.6 billion had been paid in 2012 commodity crop indemnities, though agricultural economists estimate the total could be as high as a record $15 billion. Currently, the government pays 62¢ on the dollar for crop insurance premiums to big commodity producers. Meanwhile, vegetable producers receive significantly less in disaster aid, closer to pennies on the dollar, and are subjected to built-in mechanisms like stage production guarantees, which pay growers a percentage of their policy based on crop growth stages. According to onion grower Chris Pawelski of Goshen, NY, the stages mechanism doesn’t exist for commodity producers, who have more political clout.
While the Senate voted in June to reduce subsidies to big farmers, the House delayed this action until after the elections. Now, Congress will have to tackle not only the 2012 Farm Bill, which includes establishing a crop disaster program and crop insurance, as well as broad spending cuts to avoid the fiscal cliff.
Pointers On Crop Insurance
Growers who need assistance to help pay for crop losses due to the 2012 drought should first deal with their crop insurance companies, if crop insurance is in place. If not, growers should contact their local USDA Farm Service Agency (FSA) office (www.fsa.usda.gov). The new Farm Bill should include a crop loss program, so growers will need to work with FSA to determine what kind of records are necessary in order to claim crop disaster aid and apply for emergency loans.
For any grower who is experiencing a problem with their policy, Pawelski recommends working with state representatives to get changes made and be as specific as possible about what you want and when you want it.
“Work with your congressional representatives’ and senators’ offices,” Pawelski says. “Tell them what you want in specific detail; tell them the reasons why you want what you want and be very persistent.”
2012 Drought Impacts
For large-scale growers of processed vegetables like sweet corn, snap beans, and peas, which are produced on irrigated land, the drought raised costs for pumping and other inputs, but had minimal effects on production or quality. But for producers of vegetable crop on unirrigated land, the drought brought other problems, including greater pressure from pests, and an emergence of unusual pests and diseases, according to Paul Mitchell, an agricultural economist at the University of Wisconsin-Madison.
The drought also raised costs for growers and processors, including extra management efforts, increased costs for insect and disease control, and higher shipping costs to move raw product to areas that were short. While growers who had crop insurance had coverage for insured losses, the associated increased costs for more irrigation and pest control were not covered, Mitchell says. Of course, many smaller growers without crop insurance policies have suffered, and without a crop disaster program currently in place through USDA, many are struggling to stay in business, due to reduced crop quality and yields, says Mitchell.