USDA defers interest on crop insurance to Jan. 31
KANSAS CITY -- The U.S. Department of Agriculture has decided to defer the accrual of interest for 2019 crop insurance premiums until either the applicable termination date or Jan. 31, 2020, whichever comes first.
KANSAS CITY - The U.S. Department of Agriculture has decided to defer the accrual of interest for 2019 crop insurance premiums until either the applicable termination date or Jan. 31, 2020, whichever comes first.
The announcement, made Thursday, Nov. 14, means producers now have until Jan. 31, 2020, to pay 2019 premiums without accruing interest. The change is for policies with an original premium billing date of Aug. 15, 2019, and was done to help farmers and ranchers nationwide affected by extreme weather in 2019. For any premium that is not paid by the new deadline, interest will accrue consistent with the terms of the policy.
Farmers and ranchers across much of the country have struggled with difficult conditions this year, including flooding both in the spring and fall, excessive rainfall, early snowfall and early freezing conditions. Producers have reported they were prevented from planting on nearly 20 million acres, a modern record. Indemnities from crop insurance have reached almost $6 billion this year, with more than $3.9 billion of that going to producers unable to plant because of flooding or excess moisture.
Crop insurance claims cannot be settled until harvest is complete, and this year's delayed harvest has squeezed cash flow.
"USDA is committed to helping farmers and ranchers impacted by the weather challenges this year, and we hope this deferral will help ease cash flow challenges for producers, many of whom are caught in a very delayed harvest," Bill Northey, USDA's under secretary for farm production and conservation, said at the National Association of Farm Broadcasters' conference in Kansas City.
USDA had previously announced a deferral to Nov. 30, 2019, providing producers with an additional two months from the traditional Sept. 30 date.
Sen. John Hoeven, R-N.D., last week met with Northey in Argusville, N.D., to discuss the flexibility and support needed for producers impacted by severe weather and held a meeting with Martin Barbre, USDA's Risk Management administrator, to urge RMA to provide assistance with crop insurance interest.
"We made the case for this additional flexibility during our meetings with Under Secretary Northey and RMA Administrator Barbre and North Dakota producers," Hoeven said in a statement. "We appreciate USDA for extending this deferral given the cash flow issues facing our producers."
Producers are encouraged to contact their crop insurance agents for more information on the interest deferral.
Congress has directed USDA to provide other forms of relief to producers facing weather disasters this year, including the Disaster Relief Act, which provided additional payments to farmers who made prevented planting claims and disaster payments to producers in counties with disaster declarations approved by Agriculture Secretary Sonny Perdue.
Perdue on Nov. 8 issued a Secretarial Disaster Declaration for 47 North Dakota counties, making producers in those counties eligible for WHIP+. Minnesota Gov. Tim Walz on Nov. 7 requested a disaster declaration for northwestern counties in his state. The program will provide up to $3 billion to producers.
"We continue working with USDA to provide assistance under (Market Facilitation Program) and WHIP+ as soon as possible, which will help farmers maintain their operations as they recover from a delayed harvest and other impacts," Hoeven said.