The 2020-2021 crop year will be remembered for years to come as the global economy experienced one of the most prolific and unprecedented pandemics in history coupled with adverse weather conditions related to drought, hurricanes, high winds, derechos, and a polar vortex to name a few across the U.S. This week, Plains Cotton Growers (PCG), traveled to Washington, D.C. and met with key Congressional leaders to advocate for the extension of the WHIP+ program to address recent natural disasters our region and the U.S. have incurred.
Currently, legislation such as H.R. 1692 by Congressman Ronny Jackson (TX13) and Congressman Henry Cuellar (TX28) and H.R. 267 by Congressman Mike Thompson (CA05) have been introduced which would extend the USDA Wildfire and Hurricane Indemnity Program (WHIP+) to cover crop losses related to natural disaster events for 2020 and 2021 respectively.
PCG supports these legislative initiatives, however, based on producer and industry assessments of the previous WHIP+ program, in our advocacy, we recommended the following improvements for a future program:
• Previous implementation of the WHIP+ program was very strenuous and data intensive on producers, insurance agencies, and local farm service agencies which caused delays in providing much needed assistance. Disaster based programs should be implemented in a way that is user friendly for all parties involved so assistance can be provided in a timely manner.
• Currently, under the implementation guidelines for WHIP+ assistance, a covered commodity followed by a different covered commodity does not meet the double-cropping definition “also known as the J Code”, which renders applicants ineligible for the program even if the producer experiences a disaster. PCG recommended that secondary or subsequent crop acres that are insured should be made eligible for WHIP+.
• The current WHIP+ program assistance is determined by taking the expected value of the crop (x) the WHIP factor (-) the actual value of the crop harvested (x) the payment factor (-) the NAP payment or crop insurance indemnity received by the producer. It is our understanding the formula as written today when determining a producer’s crop insurance indemnity, it also includes the producer’s paid insurance premium which inadvertently penalizes a producer when buying a higher level of insurance coverage. In our briefing with Congressional members, PCG recommended netting out the producer paid premium in the WHIP+ formula which is consistent with previous disaster-based programs.
As Congress prepares to consider legislation in the coming weeks related to natural disasters, PCG stands ready to work with them and other allied organizations to ensure the program is implemented efficiently and effectively in order to provide needed assistance to agriculture when disasters occur.