WT Farmers Reap Insurance
Windfall On Unlikely Crops

HOUSTON —(AP)— Some West Texas farmers were able to recoup $15.7 million in insurance claims this year thanks to federal loopholes that raised crop benchmarks so high that farmers were guaranteed a payout, the Texas Journal of The Wall Street Journal reported last week.

An estimated 200 producers in Glasscock, Reagan, Upton and Midland counties planted 70,000 acres of pima cotton, a crop so rarely grown that the nearest gin for pima is about 100 miles away.

Meanwhile, farmers in Tom Green County planted more than 16,000 acres of dryland corn, of which they had planted fewer than 100 acres in each of the previous five years because of the region's unpredictable rain.

In both cases, nearly none of the acreage bore salvageable crops, allowing farmers to collect $15.7 million in crop insurance payouts — at least $6 million more than they would have collected had they stuck with their traditional crops of upland cotton and grain sorghum, federal regulators told Texas Journal.

Just how many farmers collected on the payout is not known because federal privacy laws prohibit insurance agents from disclosing that information.

"I'm glad for the farmers because it made them some money," said B. J. Havlak, manger of the Glasscock County Co-op Gin in St. Lawrence. "It kept them in business for another year."

However, the payouts have rankled many. Insurers say they've gotten calls from irritated farmers who didn't know about the high yield benchmarks and are angry they weren't notified. Some farmers who didn't cash in complain that their neighbors bragged about the payouts at local co-ops and coffee shops.

Officials with the U.S. Department of Agriculture's Risk Management agency, which oversees the insurance program, have made four trips to West Texas to investigate. So far, they've concluded no rules were broken.

But they have virtually outlawed pima and dryland-corn insurance for the area next year.

Wall-area farmer Doyle Schniers planted 3500 acres of dryland corn even though he had never grown it before. While he's likely to break even on the 4700 acres of cotton he planted, he expects a profit of about $22 an acre — or $77,000 — on corn, thanks to the program.

Rocky King, a Midkiff farmer, had a similar experience with pima cotton. He says he lost money on his 900 acres of irrigated upland cotton, but made a profit of up to $44 an acre on the 350 acres of pima he planted.

"I'd have been about $45,000 shorter if I hadn't" planted it, King told Texas Journal.