RH News | Archive
For Immediate Release
September 13, 2000 For More Information Contact:
Steve Carthel, Vice President Southwest Division (806) 353-4344
Texas and Oklahoma Farmers Face Catastrophic Drought Losses
Farmers in Texas and Oklahoma are facing drought conditions that are worse than the dust bowl years of the early 1950s. No precipitation has been received in a wide area for more than 2 months. Agricultural drought losses are expected to top $595 million by the end of the year and the lack of soil moisture will drastically affect Fall planting.
The good news is that many farmers in Texas and Oklahoma have already addressed their production risks associated with severe drought and other natural perils by purchasing crop insurance. These growers have purchased coverage that meets their individual financial management needs and they will not have to rely solely on legislation and administration of disaster assistance to pay bills and continue operating. Loss payments will begin flowing once losses can be determined under defined loss adjustment procedures. Crop insurance loss payments have already been distributed in excess of $200 million with the volume of payments growing daily.
The percent of eligible acres insured under the Federal crop insurance program in Texas and Oklahoma is nearly 80%. Growers were offered several crop insurance product and coverage level alternatives for the 2000 crop year. A majority of growers in Texas and Oklahoma have elected at least a 65% coverage level under the Multiple Peril (MPCI) or Crop Revenue Coverage (CRC) crop insurance programs. Estimated protection in force for the 2000 crop year in the two states is over $2.3 billion (see attached table). Steve Carthel, Vice President of the Southwest Division of Rain and Hail insurance Service, the crop insurance industry leader, suggests, "high participation and significant protection in force should give many growers the peace of mind that they will have the means to survive the severe drought."
Carthel encourages growers to keep in touch with their Rain and Hail agent to make sure that they do not jeopardize any policy benefits. For example, damaged crops often need to be evaluated by an adjuster before the acreage is put to another use. Agents can also facilitate loss reporting for their insureds.
It is still unknown how long the drought will persist. Additionally, the Agricultural Risk Protection Act has provided several reforms to the crop insurance program. Specifically, the Act provides additional premium assistance, which may allow growers to increase their coverage for about the same out-of-pocket expense. Growers should be sure to see their Rain and Hail agent to discuss program changes and coverage for their 2001 Fall crops. Sales closing dates for many Fall crops is September 30th.
view page 2 (Estimated Protection in Force and Losses Paid by Selected County)
