Drought and Crop Insurance: Disaster Declarations and the 2012 Crop Year

Posted on July 20, 2012 · Posted in Agricultural Law, Agriculture Law, Crop Claims, crop damages, Crop Insurance

As the drought of 2012 continues, USDA has expanded disaster declarations to  cover the entire state of Arkansas.   Unfortunatley, the forecast for mid-south weather suggests more high temperatures and low rainfall.  Fourteen of Arkansas’ counties are now experiencing what is considered “exceptional drought.” What does this mean to farmers?

Well,  farm operators in the counties declared as disaster areas are eligible for low-interest emergency loans.  USDA has also announced some farm program changes that should improve the delivery of assistance to producers in disaster areas.  These changes should include the reduced interest rate on emergency loans as well as reductions in processing time.

The University of Arkansas Division of Agriculture has also launched a site with drought resources  for Arkansas farmers.  It may be worthwhile to check it out if you are currently struggling with a drought related issue.  The site can be found at http://arkansasdroughtresourcecenter.wordpress.com/.

The Drought of 2012 and Crop Insurance Concerns

The 2012 drought and crop insurance claims arising from this drought have begun to receive some national attention.  Reuter’s reports that covered losses may exceed the 2011 record of $10.7 billion.  Crop insurance providers have also begun to issue press statements ensuring farmers that there is adequate money to satisfy their claims.

Producers shoud be aware that the failure of irrigation systems, due to a loss in water supply, may be an insurable cause of loss.  In addition, farm operators must be certain to comply with  policy provisions concerning timely notice.  If you feel you have a drought related loss to your crop, contact your crop inurance provider and protect your interests by:

  • Notifying your crop insurance agent, in writing, of crop damage.  Remember, your crop insurance policy requires notice within 72 hours of the initial discovery of damage.
  • Not destroying damaged crops without written authorization from your insurance provider (AIP).

For more information on legal issues arising from the 2012 drought and crop insurance claims, contact Grant Ballard at (501) 280-0100 or by email at gballard@bankslawfirm.us.