The USDA Risk Management Agency (RMA) will continue to defer accrual of interest for 2019 crop year insurance premiums to help the wide swath of farmers and ranchers affected by extreme weather in 2019.
The agency will defer the accrual of interest on 2019 crop year insurance premiums to the earlier of the applicable termination date or January 31, 2020 for all policies with a premium billing date of August 15, 2019. This extension is necessary since harvest progress has been very delayed and crop insurance claims are not typically settled until harvest is complete, squeezing cash flow even further.
“USDA is committed to helping farmers and ranchers impacted by the weather challenges this year, and we hope this deferral will help ease cash flow challenges for producers, many of whom are caught in a very delayed harvest," Bill Northey, USDA's Under Secretary for Farm Production and Conservation said.
USDA has previously deferred it until November 30, 2019, providing producers with an additional two months from the traditional September 30 date. Now, producers will have until January 31, 2020 to pay the 2019 premium without accruing interest. For any premium that is not paid by the new deadline, interest will accrue consistent with the terms of the policy.
This extended deferral builds on other steps USDA has taken to support farmers and ranchers impacted by flooding and other disasters. So far this year, producers have reported they were prevented from planting on nearly 20 million acres, a modern record. Indemnities from crop insurance have reached almost $6 billion this year, with more than $3.9 billion of that going to producers unable to plant because of flooding or excess moisture.
Farmers who planted cover crops on prevented plant acres were able to hay, graze or chop those fields earlier than November this year while maintaining eligibility for their full 2019 prevented planting indemnity. USDA adjusted the 2019 final haying and grazing date from November 1 to September 1 to help farmers who were prevented from planting because of flooding and excess rainfall this spring. The agency also determined that silage, haylage and baleage should be treated in the same manner as haying and grazing for this year.