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Sunflower insurance program still up in the air
BISMARCK, N.D. (AP)--Sunflower farmers say improved oilseed market conditions during the upcoming growing season might help persuade the federal government to keep a relatively new insurance program, with a few changes. The U.S. Department of Agriculture's Risk Management Agency last year proposed doing away with "revenue assurance" coverage for sunflowers starting in 2009, as part of an effort to simplify the overall crop insurance program. A public comment period ended last fall, but a final decision has not yet been made. "Nobody knows what's going on," said Mike Clemens, a Wimbledon farmer and past-chairman of the National Sunflower Association. "It's just sitting in limbo at this point." Brent Doane, an RMA spokesman in Washington, D.C., said he did not know when a final decision would be made. He said the public comment period was extended for about a month last fall, and that RMA has been working with the sunflower group. The agency "is doing all it can do to respond positively to comments requesting continuation of revenue assurance for sunflowers," he said. Traditional crop insurance protects against production problems. Revenue assurance policies differ in that they protect farmers from both low yields and low prices. The policies have been available since 2000 in North Dakota--the top sunflower-producing state--and since 2004 in South Dakota, Kansas, Colorado, Minnesota and Montana. They have not been widely used. Only about 12 percent of crop insurance policies sold nationwide for sunflowers since 2004 have been revenue assurance, according to RMA data. The policies guarantee farmers a base price for their crop. Both the National Sunflower Association and RMA say that in the case of sunflowers, the revenue assurance program has not reflected what the crop is actually worth. While RMA wants to eliminate what it says is a dysfunctional program, the sunflower group believes the formula used to calculate the base price can be fixed, and has given RMA two proposals to change the way it is calculated, said John Sandbakken, the association's international marketing director. Doane said he was limited in discussing details, but that "RMA is working hard to assess alternative methods." The problems have arisen because sunflower revenue assurance policies are based on soybean oil futures, since there is no sunflower oil futures market. Last spring, the base price guaranteed for sunflowers through the pricier revenue assurance policy was lower than the price guaranteed by the cheaper multiperil policy. The opposite is likely to be true this year, primarily because of an increase in soybean prices, Clemens said. The revenue assurance base price will be announced early next month, ahead of the March 15 deadline to insure 2007 crops. "It's the perfect market situation this year" for revenue assurance policies, said Clemens, who went with a multiperil policy last year. Sandbakken said the revenue assurance base price still is unlikely to reflect what farmers can expect to get for their upcoming crop if they plant NuSun, a popular variety that produces a healthier oil. The National Sunflower Association wants to change that, he said. "We want to give people a choice, rather than be stuck with just one option," he said. 4 Star NE 3/5/07 10 B Date: 2/28/07
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