The Hagstrom Report

Agriculture News As It Happens


Crop insurers issue vague statement on Vilsack request

The crop insurance industry was vague Monday in responding to a request by Agriculture Secretary Tom Vilsack that companies not charge farmers interest on delayed premium payments due to the drought.

In a call to reporters, Vilsack noted that crop insurance premiums are usually due on August 15, and that companies have been providing a 45-day grace period until September 30. Policy holders who are unable to pay their premiums accrue an interest penalty of 1.25 percent a month, but USDA is encouraging crop insurance companies to voluntarily forego charging interest on unpaid crop insurance premiums for an extra 30 days, to November 1, for spring crops, Vilsack said.

“We realize that they are not required to do this,” Vilsack said, adding that USDA will not require payment of uncollected payments to USDA during this period.

Vilsack said he had conveyed the request in a letter to the companies.

National Crop Insurance Services issued a statement that did not address Vilsack's request directly.

“The crop insurance industry will continue to work hand in hand with our farmer and rancher customers and the USDA to ensure that America’s agriculture sector survives and again bounces back from Mother Nature’s many challenges,” National Crop Insurance Services President Tom Zacharias said in the statement.

Zacharias also noted that “In 2011, some 84 percent of eligible farm land was protected by crop insurance, and farmers who purchased those policies collected their indemnities usually within 30 days of having their paper work finalized.”