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ND insurance agents say prevent-plant crop insurance rules are untenable

FARGO, N.D. -- A new head of the U.S. Department of Agriculture's Risk Management Agency got an earful from U.S. Sen. John Hoeven, R-N.D., and a roomful of farmers and crop insurance agents in Fargo, about the agency's handling of prevent-plant rules.

Brandon Willis, at the first of two roundtable meetings, heard from farmers and agents about a "one-in-four" rule that farmers thought made them eligible for prevent-plant payouts, if they had planted the parcel in any of the four years prior to their indemnity claim.

"You've got a confusing rule here that needs to be addressed," Hoeven told Willis. Hoeven and others in the May 2 meeting blasted the agency for untimely, unspecific and changeable rules. Among other things, Hoeven said the agency should honor a policy that allows prevent-plant crop insurance payments if a farmer plants in one year out of four.

Willis started his remarks declaring the agency wouldn't change the policy that allows it and crop insurance companies to disallow payments.

Doug Hagel, Risk Management Agency regional director in Billings, Mont., who oversees North Dakota, confirmed that -- for prevent-plant purposes -- the agency recently determined the 2012 crop year to be "abnormally dry." The fact that the state was included in federal drought monitor designations meant it could not count as a planted year in the one-in-four-year policy, he said.

Hagel acknowledged there is no clear rule about what constitutes abnormal weather. "It would be great if" the Risk Management Agency came up with a clear rule, he said.

Farmers in the room acknowledged that 2012 started out wet and turned dry. But they were astounded that agency would deem it too dry to count for prevent-plant, because only 162,687 acres were counted in prevent-plant in the state, setting numerous near-historic yield records. In comparison, 5.6 million acres in the state received prevent-plant payments in 2011.

"To call that abnormally dry for prevent-plant purposes is ludicrous," said Kevin Skunes of Arthur, N.D., representing the North Dakota Corn Growers.

Doug Johnson, president of Tri-County Insurance, based in Fargo, said it has become clear to him that Risk Management Agency officials are not "fans of prevent-plant, in any fashion."

"I would not say we are not fans," Willis responded. "I would say there are so many circumstances where you could have prevented plant, it is an issue the agency struggles with." But he says "the law is the law."

Willis did not say whether the "abnormally dry" designation for the state could be changed.

Gary Ihry, of Ihry Insurance in Hope, N.D., said perhaps prevent-plant should be more expensive, or farmers could have the option of buying 90 percent coverage on normal crop insurance.

Dan Weber, an insurance agent from Casselton, N.D., said the problem is that the rules are so loose that three companies could be paying and three companies not paying in a five-mile radius.

"I think we need to make it more clear for the companies, because right now, it's clear as mud," Weber said.

Doug Johnson gave an impassioned statement, offering the "radical" suggestion that prevent-plant insurance be discontinued entirely.

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