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PIA National Asks USDA/RMA to Treat Burley Tobacco Closing Date as "Open"

PIA National has asked the U.S. Department of Agriculture's Risk Management Agency (RMA) to leave the sales closing date for Spring 2005 contracts for burley...
April 5, 2005

PIA National has asked the U.S. Department of Agriculture's Risk Management Agency (RMA) to leave the sales closing date for Spring 2005 contracts for burley tobacco open, due to the inability of county offices of the USDA's Farm Service Agency (FSA) to provide farmers with the data they need to secure an accurate valuation of their crops.

Although the March 15 sales closing date for insuring burley tobacco contracts under federal crop insurance for spring 2005 has already passed, PIA National believes the date must be treated as "open" until FSA county offices can reasonably deliver accurate yield data to farmers.   
 
Burley tobacco farmers have traditionally calculated their production based on pounds. As part of the 2004 tobacco buyout, farmers must calculate Actual Production History based upon yield. FSA county offices were supposed to have the last four years of production reports based upon yield ready for farmers by April 1. But due to continuing software problems, FSA county offices will not be able to meet this date.

RMA has advised that farmers and agents need only take past production in pounds and divide by the farmer's acreage, to secure a reasonably accurate conversion to yield.  But "guessing" production figures and coverages risks unreimbursed losses for farmers and creates an E&O exposure for agents.  PIA National is also asking RMA for an indemnification for crop insurers and agents in terms of any issues arising directly from this one-time transition year. 

On March 21, PIA met with USDA/RMA Administrator Ross Davidson to make our views known and discuss potential solutions. On March 31, PIA sent a letter to Davidson with recommendations and a separate memo to PIA affiliates in the affected states.

"When America's farmers need crop insurance, they turn to their PIA agents," said PIA National Vice President Donna L. Pile of Lexington, Kentucky. "Now, PIA crop insurance agents are going to bat for their farmer clients to solve this problem."

PIA National Asks USDA/RMA to Treat Closing Date as Open for Burley Tobacco (4/1/05)

PIA Letter to RMA Administrator Ross Davidson (3/31/05)

PIA Memo to PIA Burley Crop States (3/31/05)

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