Dry Conditions Spark Interest In FCIC

Prevented Planting Coverage Option

Lubbock, May 6, 2011                      By Shawn Wade

      If Shakespeare were a West Texas cotton farmer, the question he might ask himself today would be - "To plant or not to plant?"

      With May only a few days under way, persistent drought conditions across much of Texas and the High Plains have many growers weighing their options for planned dryland cotton acreage. Most would agree that with about one full month until the arrival of federal crop insurance final planting dates, May 6 is still too early to throw in the towel on establishing a dryland cotton crop.

      Those same producers also would agree that with each passing day it becomes more critical that they understand what their options are in regard to the federal crop insurance program and plan to act accordingly. To be sure, the preferred situation for all growers is to receive the moisture necessary to timely plant and harvest a cotton crop in 2011.

      Presently it is the dryland producer who is most at risk because their window of opportunity for establishing a 2011 crop is directly tied to a timely influx of rainfall before applicable insurance final planting dates.

      Irrigated growers also are anxious for relief, but the difference is that their window of opportunity for producing a 2011 crop is less likely to be slammed shut if moisture conditions do not significantly improve before mid-June.

      Should timely rains not fall over the next few weeks, however, a dryland producer still has a couple of options under the Federal Crop Insurance Program's current Cotton Yield and Revenue coverage policies.

      Typically, growers in the High Plains region understand that planting their initial insured crop on or before the applicable insurance program final planting date maximizes their insurance coverage and provides them a full set of management options later in the season. As always, growers should plant in accordance with practices deemed appropriate for the area and conditions.

      The main reasons why most growers opt to plant a crop, even when moisture conditions are less than favorable, is that it positions them to: (1) establish a crop if they receive a late rainfall event on the farm on or around the final planting date; (2) qualify for 100 percent of their chosen insurance coverage guarantee should the initial crop fail to germinate and emerge; and (3) maintain the flexibility to plant an uninsured second crop behind a failed initial crop if conditions improve.

      The second, and rarely exercised, option for High Plains cotton growers is filing a Prevented Planting claim. Prevented Planting coverage is included in the Federal Crop Insurance Program's Upland Cotton insurance policy, but only provides coverage equal to 50 percent of the protection provided by the grower's crop insurance policy for the insurance period.

      Even though a Prevented Planting claim provides significantly less protection than what is provided when a crop is planted and then failed, an extended forecast that provides little hope for immediate relief has increased interest in this little used option.

      For growers considering the prevented planting option in 2011 it is important to understand the ramifications of submitting a Prevented Planting claim instead of planting the crop and filing a claim if the crop fails to emerge or emerges and subsequently is lost.

What qualifies as Prevented Planting?

      Normally a "prevented planting" situation is thought of in terms of a farmer being physically unable to get into the field to plant a crop due to excessive rainfall or flooding.

      Drought conditions, however, can also be considered grounds for a prevented planting claim under the federal crop insurance program's Prevented Planting coverage if the situation is widespread and it can be adequately documented that conditions exist where there is "insufficient soil moisture for germination of seed or progress toward crop maturity" that is similarly impacting growers in the surrounding area.

      Despite this language or any provided documentation it is important to know that final approval of every prevented planting claim is left to the discretion of the approved insurance provider (AIP).

      Since drought conditions do not physically prevent a grower from planting the crop, the decision to not plant and pursue a Prevented Planting claim is a management decision that should be made only after they have a clear understanding of the rules that apply to potential Prevented Planting acres.

      The best advice for any grower considering a Prevented Planting claim is to consult with their insurance agent and/or approved insurance provider and have the Prevented Planting option and its impact fully explained to them before making a final decision.

      In a nutshell, growers need to know when the Prevented Planting claim must be filed; know what supporting documentation must be provided to support the claim (while also understanding that the claim could ultimately be denied and leave them without any insurance coverage on the acreage); and fully understand what can and cannot be done with prevented planted acres after a claim is approved to ensure the grower does not inadvertently trigger the federal crop insurance 1st-crop/2nd-crop coverage provisions.

      When it comes to deciding whether to go down the Prevented Planting pathway in 2011, cotton growers are encouraged to get as much information as possible before determining whether prevented planting is the right choice for their specific situation.

      Here are a few key questions that growers should ask their insurance agent or approved insurance provider before deciding to pursue a Prevented Planting claim on dryland cotton:

      -When do I have to file a Prevented Planting claim?

      -What documentation is required to support a Prevented Planting claim?

      -How are eligible acres determined?

      -Do I need a history of planting dryland crops to qualify?

      -What can I do with Prevented Planting acres after a claim is approved?

      -How can planting a cover crop impact my Prevented Planting payment?

      -Can I obtain/earn revenue from a cover crop planted on Prevented Planting acres?

      -When is a Prevented Planting payment finalized?

      -What are acceptable cover crops on Prevented Planting acres?

      There are literally hundreds of other questions that could be asked, but these will get the ball rolling and help growers make a decision that maximizes their protection and provides them the flexibility to change course if and when conditions improve.


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Cotton Inc. Requests Producer Input Through

Producer Priority Survey

      Cotton Incorporated is encouraging producers to take their electronic Producer Priority Survey. The survey will remain open until May 25.

      The first 1,000 respondents will receive one of the new Under Armour "Charged Cotton" t-shirts. The next 1,000 respondents will receive a high-quality jeweler screwdriver set. Gift awards terminate after 2,000 surveys have been completed.

      "We know producers are too often asked to complete surveys, however, their input here is vital because it will help decide how we allot their assessment dollars to ag research projects moving into 2012," explains Dr. Kater Hake, Vice President of Agricultural Research for Cotton Incorporated.

      This survey started with a directive from the board members of Cotton Incorporated and the Cotton Board who wanted to give grass-roots producers the opportunity to offer their individual input to help guide the efforts of their cotton check-off program.

      By now producers should have received a postcard in the mail, which includes a Web address of the survey and a code to "unlock" the survey. The 15 minute survey has two parts: 1) An open-ended opportunity for farmers to comment on their issues/concerns throughout the growing season and 2) the ability for them to prioritize their specific issues/concerns.

      Hake said Board leadership wants the results of the survey tabulated and presented during Cotton Incorporated's June meeting.


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Details on 2011 Drought Relief Program

Available Soon on PCG Website

      The Plains Cotton Growers website is being updated to include links to all of the currently available seed company provided cotton risk sharing programs that will be available to growers in 2011.

      Program information will be available for programs being offered by All-Tex, Americot/NexGen, Croplan, Monsanto/Delta & Pine Land, FiberMax/Stoneville, and Phytogen.

      Keep checking back at http://www.plainscotton.org for the updated links.


Download 2011 Loan Charts, Premium & Discount Tables At: http://www.plainscotton.org