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PIA National in Talks With USDA on Crop Insurance for Burley Tobacco

PIA National has been having discussions with officials of the USDA Risk Management Agency about a problem that has developed regarding crop insurance and burley...
March 22, 2005

PIA National has been having discussions with officials of the USDA Risk Management Agency about a problem that has developed regarding crop insurance and burley tobacco.

Independent agents are facing great difficulty writing crop insurance policies for burley tobacco this year because of the recent change from insuring based on pound and now basing coverage on yield.  This change occurred as a part of the tobacco buyout in 2004.  USDA/FSA offices are apparently not in a position to have past years' burley tobacco reports converted from the former measure of pounds to the new rating base of yield, in time for the March 15 closing of the federal crop insurance contract spring season.

What It Means to Agents: This is of great concern to PIA members who sell crop insurance because accurate background information on prior yield information is needed in order to determine, with their farmer customers, what amount of insurance to secure for the coming year. "Guessing" the needed amount of coverage poses an E&O risk for PIA members.

PIA has been working closely with insurance agents in Kentucky as well as with Senate and House Agriculture Committee staff to find the best possible solution at this time. PIA has secured a meeting with USDA/RMA officials on Monday March 21, to discuss our concerns and explore solutions.

Crop Insurance for Burley Tobacco (PIA memo to USDA/RMA 3/16/05)

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