Focus on Agriculture: Despite drought, crop insurance provided 'pretty good year' for covered farmers

Posted: Nov. 20, 2012 3:51 pm Updated: Dec. 19, 2012 7:16 pm


Farmers covered by federal crop insurance might not only have had their losses covered during this year's drought, they also might have made more money than they had predicted in March.

"Insured farmers had a pretty good year," University of Missouri Extension economist Ray Massey said.

About 70 percent of Missouri farm acres were revenue-protected by the Federal Crop Insurance Corp. in 2012, Massey said. An additional 13 percent had insurance based on yield protection.

"In a tough year like 2012, crop insurance is the difference between financial hardship and getting the crop into the ground next year," FCIC manager William J. Murphy said.

Over a 10-year period in Missouri, $1.80 in federal crop insurance indemnities was paid out for every $1 paid in premium by farmers, said Ron Plain, MU Extension economist and professor of agricultural economics.

"For the state of Missouri, it's a good investment," Plain said.

Massey said most farmers did not take crop insurance until after 1990, when participation was a prerequisite to take part in other federal programs. The federal government subsidizes crop insurance to give farmers an incentive to buy it and to reinsure insurance companies that might have large losses from years like this one.

The U.S. Department of Agriculture Risk Management Agency sets the costs, which vary by the level of coverage the farmer chooses. Farmers who receive indemnities totaling more than $200,000 should expect to be audited by FCIC, Massey said.


Balancing runoff, erosion

Collaboration between the University of Missouri Extension and the USDA Agricultural Research Service has shown that using a rotary harrow to incorporate atrazine in the soil balances the amount of runoff and erosion compared with other tillage systems.

The harrow decreases the runoff compared with no-till and decreases erosion compared with minimum till use of a field cultivator, said Bob Lerch, an Agricultural Research Service soil scientist and adjunct assistant professor at MU.

In Missouri's claypan soils, the two biggest water-quality issues are soil erosion and atrazine contamination, Lerch said.

About a decade ago, he and some of research service colleagues discussed the idea of using a tillage implement and sprayer combo to incorporate atrazine into the soil while keeping enough crop residue to control erosion.

"We didn't want to come up with a new implement. We thought there could be something out there on the market that could help solve this problem," Lerch said.

Because of lack of funding, the idea wasn't pursued for several years. Then Lerch was asked whether he had any ideas for a capstone project for agricultural systems management. Syngenta, which needed to come up with best-management practices to control atrazine, funded the research and demonstration project.

A group of students did work showing that the rotary harrow was probably the best combination of incorporating atrazine and leaving quite a bit of crop residue. It also has a very high working capacity -- a farmer can cover 40 acres an hour -- and doesn't require a huge tractor.

Adopting the research results is the next step.

"What I'm saying is, don't till more. I'm saying till differently and till with a purpose," Lerch said. "Till with the idea that you are going to minimize erosion, but you will mix that chemical in just a little bit to keep it out of the waterways. That's good for the producer because of better weed control and better yields."


-- Compiled by Herald-Whig Staff Writer Deborah Gertz Husar