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Texas Agriculture Archive
April 7, 2006
LRGV growers say...
No-plant crop insurance
needs revisions
By Bobby Horecka
Field Editor
Larry Sklos and his family have been farming in Hidalgo County since the early 1920s, and never, he says, have any of them seen it so dry.
Last year saw just 11 inches of rain fall on many parts of the Lower Rio Grande Valley—half the amount they normally receive—and just three of those inches have fallen since last August, leaving farmers in desperate times as they face a new planting season.
"We couldn't dream of making a stand if we planted in these conditions," Sklos said. "Unfortunately, we also can't afford not to plant under the current preventative planting provisions of the crop insurance program. We wouldn't even earn enough to cover the production costs we've put in so far."
That's why he and others around the nation are pressing national agriculture leaders to rethink their budget allocations regarding agriculture spending in the crop insurance programs.
Grain sorghum farmers in the McCook area of eastern Starr and western Hidalgo counties have invested, on average, about $70 per acre in preparing their land for planting, according to Dr. Luis Ribera, agricultural economist at the Texas A&M Agricultural Research and Extension Center at Weslaco.
But without soil moisture, growers know seeds are not likely to germinate. If they had decided not to plant, the "prevented," or no-plant clause of their crop insurance program, would have paid about $30 per acre.
Cotton producers are facing anywhere from $90-$100 in production costs, Ribera said, with about $70 return from insurance programs if the crop should fail.
Despite the increase in production costs, many Rio Grande Valley farmers are eying cotton for the higher net return in the insurance program, he said. Some 220,000 acres were dedicated to cotton last year. Ribera said the region could see as many as 150,000 more acres in 2006.
For farmers like Ted Prukop, who farms about 1,200 acres in the McCook area, not planting is no option—losses would be too great.
"This crop insurance program is written for the entire nation," Prukop said. "It doesn't fit in down here in our subtropical area where we have to work the ground year 'round. It's not like in Kansas where the ground freezes right after harvest and isn't worked by the farmer until he's ready to plant again."
Ribera, who crunched the numbers for local growers, agreed.
"No-plant crop insurance does not take into account the many expenses growers here make for months in preparing their land for planting," he said. "These are expenses growers in other parts of the country don't have. It's important that these growers get paid more not to plant because, as it is now, it is not economically viable not to plant."
Plus, if Prukop and his neighbors plant for the sake of getting full-coverage insurance payments, they risk disturbing the soil and creating dust bowl-like conditions.
Full coverage does not mean payment on 100 percent of the value of their crop, Ribera said. If a crop won't make a stand or emerge from the soil, crop insurance pays growers 65 percent of the value of a crop, based on historical yields and a preset value per bushel of grain sorghum or pound of cotton lint.
Adding pressure to the situation is the calendar. To qualify for federal crop insurance and avoid penalties for planting late, growers here had to plant by March 31.
Ribera said grace periods do exist for the insurance program, giving farmers a few more days past the deadline. However, each day past March 31 counts against the producer in percentage losses of the overall insurance payment.
Current budget proposals before House and Senate appropriations committees have included significant cuts in spending plans at a time when the face of agriculture is looking quite grim.
Sklos and other agribusiness leaders presented their concerns to Congress and the U.S. Department of Agriculture. Producer groups are asking for a 35 percent increase in the preventative planting options of the crop insurance program.
Unfortunately, Ribera said, none of those changes will likely go into effect this year, when farmers actually need them. "The best we can likely hope for is some sort of increase in the program next year," he said.
And that could be too late.
Long-term forecasts aren't looking favorable, either. More than 250 producers met recently in the Corpus Christi area to hear from National Weather Service specialist John Metz. Although he offered a glimmer of hope for the parched region with 10-day forecasts calling for a few showers over South Texas, meaningful rains weren't in the forecast until late May and early June.
"This is the worst we've seen it around here," said Larry Falconer, Extension crop specialist in Corpus Christi. "We're not holding out a lot of hope for crop production around here this year."
Falconer's region comprises primarily dryland cotton and sorghum acreage. His farmers have until April 15 to get their crops planted. Given current soil moisture conditions, he said he doubts anything planted will make much of a stand.
Soil moisture testing equipment in Corpus Christi indicates most of the area will need at least six inches of rain before conditions are optimal for planting.
"This is no fun for anybody," Prukop said. "We don't want to make a living from a disaster program. In fact, if it rained several inches right now, I'd delay planting and take the penalties because I'd rather make a crop than get an insurance payment. But rain is just not in the forecast."
