USDA Undersecretary discussed improved risk management tools

USDA is working to support producers with a variety of risk management and relief programs. Undersecretary Bill Northey discusses what the agency has to offer.

USDA’s Risk Management Agency is rolling out a new enhanced coverage option for crop insurance. It will be available for 31 spring-planted crops for the 2021 crop year and is expected to be available for additional crops starting in the 2022 crop year.

Undersecretary Northey says that it will give producers new flexibility.

“It really helps in some of those shallow losses, where folks will buy a crop insurance policy but those losses above that policy you can buy protection in those areas, and so there are several products out there,” Northey states. “It also allows a person still to participate in ARC and PLC so those are things that are important to many producers.”

After the Holcomb, Kansas packing plant fire and COVID-19 caused massive price swings in the market, USDA is also looking to improve livestock risk management tools by making them more affordable for producers.

According to Northey, “Some of those livestock products the subsidy have been very small, so that has made those products fairly expensive for coverage. We’re increasing the subsidy more like a crop insurance policy. Typically, on a crop insurance policy maybe producers pay 40 or 50 percent of the premium and the government pays the other portion, and it’s in the government’s interest to be able to have producers have good risk management tools.”

The improvements, which include moving premium due dates and increasing premium subsidies, will be implemented by July 1st for the 2021 crop year.

Another option for producers facing COVID-19 challenges is the Coronavirus Food Assistance Program. Northey encourages producers to reach out to their local Farm Service office to apply.

“We actually are paying about $5-600 million dollars a week so we’re now just little over $10 billion dollars in payments on the way up to potentially $14 billion dollars, and we continue to see folks come in but that’s slowing down a little bit,” he notes. “We think we’ve got the bulk of the folks, but I’m sure we have some folks who are waiting closer to the deadline.”

He says that any potential for a third round of CFAP is up to congressional funding.

“There were a few dollars left from CFAP 1, less than what we had set aside for that. So, that’s possible, but of course the biggest driver of that is if Congress decides to come forward with more money or not,” he adds.

The next round of COVID-19 relief has been stuck for several months now, and House and Senate leadership struggle to find common ground for funding.

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