WASHINGTON – Acreage insured by Maryland farmers is at its highest level since 1995, when coverage was briefly mandated for farmers who wanted to apply for federal crop subsidies.
Despite the increase, however, Maryland still has one of the lowest levels of participation in the program, at a time when drought is likely to ravage harvests.
“It stays stubbornly low, and in a year like this, it’s sad,” said Eric Edgington, a spokesman for the Risk Management Agency that handles crop insurance programs for the federal government.
As of the first week of September, Maryland farmers had reported 676,831 insured acres, up from the 637,999 acres insured in all of 2001.
“There’s been a lot of days when the phone just rings and rings and rings and it’s hard to get things caught up,” said crop insurance agent Kathi Levan.
She said she has written three times as many policies she did last year, and increased the level of coverage for over 30 farmers.
“A lot of them have had a mindset in the past that (insurance) was just too expensive. This year . . . they knew what they might be looking at this fall. That got them moving,” Levan said.
But it wasn’t just bad weather predictions that prompted farmers to take out or increase their insurance. Increased federal support and a state-run promotional campaign also helped, said Patrick McMillan, assistant to the Maryland secretary of agriculture.
Federal subsidies that help farmers pay insurance premiums went up significantly under the Agricultural Risk Protection Act of 2000, and last year the state began offering its own premium subsidies to farmers. State and federal subsidies totaled nearly $5 million in 2001 and for this year they had reached about $5.6 million as of Sept. 9.
“You almost got to have that safety net under you,” said Jim Miller, a fifth-generation farmer who has insurance for the crops he farms on 1,000 acres in Kent County. “If you don’t have that reserve, you’re up a creek.”
But while nearly 80 percent of insurable acreage is covered nationwide, just 46 percent of Maryland’s acreage was covered last year, according to a report from the Crop Insurance Research Bureau.
Participation in crop insurance was so low that Maryland was one of 15 states to get a federal grant for outreach programs last year. Extension agents used part of the $286,000 to hold crop insurance workshops, and the state Agriculture Department used the rest for an ad campaign, mailing leaflets to farmers and taking out radio spots.
While Edgington said participation in crop insurance programs in Maryland is still spotty, the timing could not be better for those farmers who have it. It is too early to forecast losses, but Levan said the impact of the drought on the state’s $1.5 billion farm industry in Maryland will be significant.
She said claims have been “tremendous” this year, and anticipates that 80 to 85 percent of farmers will make some type of claim.
While some farmers are well enough off that they do not have to worry about paying back loans, others cannot cover their investments with the insurance money and may use it to take out more loans.
“The insurance will fill up some of the gaps, but it won’t fill up all of the gaps,” said John Hall, director of the Kent County agricultural extension.
The Bush administration is hoping that insurance will fill most of the gaps for farmers. It is trying to encourage crop insurance so it will not have to appropriate disaster relief, like the $6 billion the Senate added earlier this month to an Interior spending bill.
That federal prompting has increased the types of coverage Maryland farmers can get. Until three years ago, they could only cover individual crops, rather than their entire farm revenue. Now that they have the option, most farmers are taking it, said Levan.
That doesn’t change the fact that financing for farmers is still a risky proposition.
“It’s a much different mindset than most people have,” Hall said. “You come into work and know every two weeks you’re going to get a check. A farmer takes out a loan at the beginning of the season and prays for rain.”