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Crop insurance may cover wheat quality lossesKansas Farmers suspecting they have losses due to wheat quality problems this harvest are advised to let their crop insurance agent know as soon as possible, according to a top official with USDA's Risk Management Agency. The 2008 wheat harvest is marred somewhat by a variety of quality problems, ranging from fungal disease to hail damage. "The most important thing to remember is to contact your insurance provider as soon as possible, and follow the company's instructions," said Rebecca Davis, director of the Topeka regional office of USDA's Risk Management Agency, which oversees the crop insurance program. As long as farmers carry multi-peril crop insurance policies, they may be eligible for quality loss adjustments, Davis said. The loss in value must be due to an event specified in the insurance policy; an example of which is excess precipitation received in many areas of the state. The excess moisture has caused head scab in isolated locations in the eastern half of the state, which is covered as a quality loss. Other examples of quality loss include low test weight, damaged kernels, and shrunken or broken kernels. Growers should note that discounts made for crop loss purposes by insurance companies are often not the same as discounts at the grain elevator. Farmers have 72 hours to notify their insurance agent after noticing a loss during harvest. One damaged sample per unit must be collected by a disinterested third party before the crop is placed into storage. The sample must then be analyzed by an approved laboratory to determine whether vomitoxin is present. If a load of wheat is rejected at harvest but the test reveals no vomitoxin, the wheat may be brought back to the elevator for possible delivery. "Loss in quality due to head scab in wheat will be adjusted like any other quality loss. Damaged kernels in excess of 15 percent and test weights lower than 50 pounds are eligible for quality adjustments," Davis said. New for 2008, between 2 and 5 parts per million vomitoxin quality losses are paid based on pre-established discount factors. Levels of vomitoxin must be established by a laboratory certified by the Federal Grain Inspection Service. Wheat vomitoxin claims will not be settled until such production is sold to a disinterested third party, fed, used, or destroyed if levels are in excess of the maximum allowable levels. RMA loss procedures require insurance providers to make every effort to find a market for the production before declaring a zero value. Therefore, insurance providers will not make declarations of zero market value until they can firmly establish that there is no market for poor quality grain. A list of potential buyers for salvaged grain and more guidance on this issue are available on the Kansas Wheat website, www.kansaswheat.org. Producers should keep track of transportation expenses, as RMA will reimburse producers for the cost to haul grain to salvage grain buyers. "The RMA discount factors for wheat are constructed by compiling and using loan discount data from the Farm Service Agency and national average loan rates for the past 10 years," she said. "These discount factors remain uniform between the APH, Crop Revenue Coverage, and the Revenue Assurance plans of insurance and throughout all counties in Kansas." Quality adjustments are based on samples obtained by the adjuster or other disinterested parties authorized by the insurance provider, such as an elevator employee. More information on quality adjustment losses and examples may be found at: www.rma.usda.gov/news/2006/11/qualityadjustment.pdf. 7/14/08 Date: 7/10/08
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