Congressmen disturbed by nursery crop insurance fiasco

A panel of local nurserymen voiced their growing disgust with the state of nursery crop insurance in Tennessee while they had the ear of two congressmen on Monday in Lincoln Davis and House Agriculture Committee chairman Collin Peterson, (D-Minn.).

Peterson didn’t mince words in expressing his take on recent actions of the Risk Management Agency, the agency responsible for overseeing crop insurance policies, which are currently underwritten by private companies.

‘The RMA is one of the most screwed-up agencies in the U.S. government, and we understand that,’ said Peterson, noting things have gotten to the point that earlier this year he felt compelled to institute corrective action.

‘We are in the process now of doing a full-fledged investigation and analysis of RMA,’ Peterson said. ‘And that’s ongoing. I have a full-time investigator down there now going through all their financial records, interviewing people, and so forth. We know we’ve got a problem there.’

To further demonstrate this, the two congressmen were presented a litany of incidents involving RMA representatives and nurserymen, including situations where an RMA representative accompanied adjusters into the field and made recommendations on what plants were covered.

‘That’s not supposed to happen,’ Peterson said. ‘That’s the responsibility of the insurance companies.’

Others reported having multiple adjusters, some as many as four.

‘And with every new adjuster it was like we had to go back to square one,’ reported one grower.

As a result, Peterson says legislators are working to revamp the agency and improve its performance.

‘We have some problems with the way they run things,’ Peterson said. ‘The authorization for RMA was done in 2000 I think. It comes up for re-authorization in 2009. We are hoping to get enough things worked out in the next month or two to overhaul this when we finalize the (current) farm bill.’

Peterson said both he and Davis are well aware of the issues disaster-plagued farmers and nurserymen are having with the agency.

‘One of the reasons I wanted to come down here is because I know you’ve got a problem with RMA,’ Peterson said. ‘I want to understand that better, because it’s possible we can get this done then maybe we can get some fixes in there to help you get this to work for you.’

The current problems are the result of a double-whammy of weather-generated disasters this year, a late freeze in April, which caused extensive damage to crops, and a devastating drought that continues to plague growers. State officials say the effect on Tennessee’s economy will be substantial.

Tennessee Department of Agriculture representative Tom Womack said it is estimated that losses to the green industry could amount to as much as $750 million statewide.

Peterson talked about the importance of funding disaster relief, which didn’t make it into the 2002 agriculture bill, but which he hopes to include in future legislation. However, both congressmen told nurserymen there is no money for disaster relief this year, due, at least in part, to the cost of the war in Iraq.

‘The thing we heard from people, and the thing I’ve experienced in my district, was that the one thing that was missing in 2002 was this disaster component,’ Peterson said, ‘because crop insurance does not always work, as you guys have figured out.’

The nurserymen agreed, noting the major inconsistencies and convoluted language and regulations in nursery crop insurance policies, which have been compounded by the total lack of input from nurserymen in the Midsouth on how the policies are written, makes the insurance almost useless. At the same time, the government is providing significant government subsidies to the insurance companies.

Nurserymen also decried the fact that underwriters based in Florida are writing the policies used here, pointing out that hurricanes are the No. 1 cause of crop damage in Florida and the growing season is significantly different in the two regions.

The problems with crop insurance have resulted in only 50 percent of the 700 nursery crop producers in the state taking out the policies. During the meeting Peterson reminded the nurserymen of another regulation, which many feel is patently unfair, and basically forces them to participate in a program they feel is useless to them under current regulations.

‘If you want any disaster assistance, you have to have the insurance,’ Peterson said.

Davis says these situations are unacceptable.

‘We’re going to have to change that,’ Davis said. ‘That has to happen. To have someone who writes the policies who does not understand the nursery industry in this state to me is absolutely wrong.

‘If we’re going to continue to provide dollars for private insurance companies to insure a catastrophic loss for our nursery industry, there needs to be at least some input on how to recognize what is actually a loss, and unfortunately that’s not happening,’ Davis said.