July 25, 2005
SPRAYING FOR PESTS AND ITS IMPACTS ON CROP INSURANCE COVERAGE
A number of pests including corn borers, spider mites, and soybean aphids have occurred in many fields in Illinois . Because this year's dry weather have caused significant yield losses in many fields, some farmers question whether to spray for these and other pests. Not spraying may lead to issues with crop insurance coverage.
Good Farming Practices and Insurance Coverage
Damage caused by insects and other natural perils is covered by multi-peril crop insurance as long as good farming practices are followed. Good farming practices are those recommended by agricultural experts that will cause the crop to progress towards the guarantee set forth in the crop insurance policy. Note that the definition of a good farming practice does not include economic considerations. Hence, spraying may be a good farming practice even if it is not economical.
On farms where the highest yields already are believed to be below guarantees in insurance policies, some farmers may be tempted not to spray because they believe that further losses caused by pests will be covered by crop insurance. These losses may not be covered because good farming practices may require spraying. A spray is a good farming practice if the spray would have been done had the fields not been covered by crop insurance.
The Risk Management Agency (RMA) regulates federally-subsidized crop insurance. If the RMA determines that a farmer has not been following good farming practices, the indemnity resulting from crop insurance will be reduced by the assessed losses associated with not following good farming practices.
Contact Crop Insurance Agent
In certain cases, damage in fields may be to the point where spraying will not have a beneficial impact. Some corn fields, for example, may have had pollination problems such that a corn borer infestation will not cause further losses. If this occurs, farmers should document dates that crop damage was discovered, what recommendations they received, and what actions were taken.
In these cases, farmers should notify their crop insurance agents of potential yield losses so that loss assessments can be conducted. During the assessment process, insurance agents can not interact with the persons conducting loss adjustments. Hence, during the adjustment process, crop insurance agents will not be able to provide information to farmers about the adjustment process.
Issued by: Gary Schnitkey, Department of Agricultural and Consumer Economics