Farmers will have some additional flexibility in the federal crop insurance program following two recent changes announced by USDA’s Risk Management Agency.
RMA Administrator Pat Swanson, who is also an Iowa farmer, says one of those changes is the return of the Prevent Plant 5 buy-up option. The option will allow farmers to purchase an additional five percent of prevented planting coverage beginning with the 2027 crop year.
Swanson says prevented planting coverage is already part of the federal crop insurance program, but the additional option gives producers another way to manage the financial risk that comes with being unable to get a crop planted. While producers hope they never need to use the coverage, weather can quickly take the planting decision out of their hands.
RMA also announced additional time for farmers to pay their crop insurance premiums. Swanson says producers with eligible policies will have another 60 days before interest attaches to their bill on December 1.
The additional time could be particularly valuable as farmers continue to deal with tight margins and weather challenges. Swanson says USDA wanted to provide producers with some additional flexibility during a difficult period in the farm economy.
Crop insurance itself can sometimes be misunderstood by those outside of agriculture. Swanson says the program is a safety net, but farmers pay premiums for their policies and choose the amount of risk and coverage that makes sense for their individual operations.
Those decisions can become critical when farmers encounter circumstances completely outside of their control.
For Iowa producers, Swanson points to the 2020 derecho as a clear example. The storm flattened corn across a large portion of the state, leaving farmers to look at crops they had spent months growing and considerable money producing suddenly lying on the ground.
Swanson says crop insurance is designed to provide protection when disasters such as the derecho strike. Revenue coverage can also provide a safety net when commodity prices fall, and producers are faced with prices below the cost of producing their crops.
With weather and economic uncertainty remaining a part of agriculture, Swanson says the goal is to make sure farmers have risk management options available that fit the needs of their individual operations.
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