Del. boosts crop insurance funds after Md. cuts money

ON THE FARM

August 03, 2008|By TED SHELSBY

When Delaware Gov. Ruth Ann Minner says agriculture is important to her state's economy, she backs up her words with bucks.

In a move that makes Maryland look a bit cheap, Delaware is boosting its state funding for a farm crop insurance program after Maryland eliminated funding for a similar plan several years ago.

Delaware's recently passed budget for fiscal 2009 included a $150,000 increase in the state's crop insurance cost-sharing program that helps bail farmers out of financial trouble when their plantings go bad.

The increase brings the total appropriation to $750,000 a year. Legislation also removes the appropriation from one-time funding status and makes it a part of the Delaware Department of Agriculture's base budget. "The money is now there every year unless it is taken out," said department spokeswoman Anne Fitzgerald.

The state program helps insure Delaware's farmers against crop damage and loss, and it shores up the state's agriculture industry by helping farmers manage their risk at a more affordable cost.

"Agriculture is a more than $1 billion industry that is obviously vital to Delaware's economy and our quality of life," Minner said. "I want to do everything I can to assist our farmers," she added, noting that the "increased funding will provide better incentives for our farmers to take advantage of improvements in available crop insurance products."

Since its inception in 2004, the program has provided more than $1.9 million in crop insurance cost-sharing to Delaware farmers.

The program provides up to 30 percent of the farmer-paid premium for crop insurance, not to exceed $3 an acre.

Maryland does have a program to help farmers pay for crop insurance, but there is no funding for it.

"The money was pulled out in the first year of the Ehrlich administration," said S. Patrick McMillan, an assistant secretary at the Maryland Department of Agriculture.

When it was funded during the administration of Gov. Parris N. Glendening, the program paid about 8 percent of the farmer's annual cost of crop insurance coverage.

McMillan said that Maryland and Delaware were two of three states that he could recall having programs to help farmers pay for crop insurance. He said he thought Minnesota had a similar plan.

The states supplemented what the U.S. Department of Agriculture paid to make insurance more affordable to farmers across the country.

"Farmers would not have crop insurance without the federal premium subsidy," McMillan said. "It would cost too much."

He estimated that the USDA pays about 50 percent of the annual insurance premium.

McMillan said that when the Maryland crop insurance program was started nearly 10 years ago, fewer than 50 percent of the farmers participated. Today, he said, about 70 percent of the farmers have crop insurance.

With the rising cost of fuel for their tractors and fertilizer for their fields, farmers can't afford not to have insurance.

"The risk is too great," McMillan said. "Farmers have too much money invested in their crops."

Maryland Agriculture Secretary Roger L. Richardson said it cost about $500 this year to plant an acre of corn. This is up from about $280 an acre last year.

According to USDA records, 5,240 crop insurance policies were sold in Maryland last year. They paid out $35.7 million last year to state farmers who suffered through one of the worst droughts in recent years.

In terms of yield per acre - the best way to measure the productivity of grain fields - Maryland farmers last year produced 103 bushels of corn from each acre planted. This was nearly 28 percent lower than the 2006 harvest.

Soybeans did not fare much better. Farmers harvested 27 bushels of beans from each acre planted - 20 percent lower than the previous year and the lowest soybean yield since the drought of 2002.

Farming is an extremely risky business. "It would be very helpful to our farmers if we could help reduce their insurance costs," McMillan said.

"Sound risk management is essential today," said Delaware Agriculture Secretary Michael Scuse. "With the help of the Delaware crop insurance cost-share program, our farmers are significantly enhancing their coverage levels."

"So much so," he continued, "that even though we experienced a drought disaster last year, Delaware farmers received over $17.5 million in crop insurance loss payments, more than double any previous year."

Scuse said there has been an 8.5 percent increase in the number of crop insurance policies sold in Delaware this year. "It is clear that the cost-share program is a good investment in Delaware agriculture, leveraging significant federal assistance and private risk coverage," he said.

Farmers' markets

Gov. Martin O'Malley and U.S. Agriculture Secretary Ed Schafer have proclaimed this week National Farmers' Market Week.

The governor and Secretary Richardson encourage consumers to celebrate by supporting Maryland agriculture and visiting a farmers' market in their area.

Every county in Maryland and Baltimore City has at least one farmers' market, for a total of 84, where consumers can purchase farm-fresh, locally grown produce, beef, plants, baked goods and fruit.

The number of farmers' markets in the United States has grown in recent years, and Maryland has been a part of this trend. In 1991, there were 20 farmers' markets in the state.

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