One of the most common questions we get as leaders of a commodity organization is simple: what is the value for members? What do we do for the producers in our area? For our Montana Grain Growers Association (MGGA) members, they have access to our Montana MarketManager Online, monthly newsletters, representation (and membership) at the National Association of Wheat Growers (NAWG) as well as the National Barley Growers Association, and representation at the local, state and national level (among other things). Many still rightfully want to know how exactly we turn local issues into policy action. Right now, I can break down one of those efforts in near real time.
Harvest Season Challenges
The latter half of the 2019 growing season has presented significant challenges for growers across the state. The North Eastern corner of the state (sometimes affectionately referred to as the Platinum Rectangle by members of the organization) has really struggled. Their crops have sat ripe in the field as excessive rainfall has lowered the quality substantially and stopped most harvest progress. Wheat, lentils, and oilseeds are quality dependent. Harvest delays and substantial harvest moisture degrades the quality of wheat (in this case mostly hard red spring wheat and durum) to the point of being useless for anything but animal feed.
Quality Impacts
Quality losses substantially lower the value of our crops, especially wheat and barley. Low quality turns crops that are worth over $5.00 into crops that are worth half of that or worse. Crop insurance is typically our safety net for production issues, it does an adequate job of covering yield losses and to a certain extent covering revenue losses (but that is tied to fixed levels based on the board of trade not actual prices received by the producer). Quality issues coupled with high production usually results in woefully inadequate coverage for producers. For example, if a producer has falling numbers (see image below for an explanation of falling numbers) below 200, they take their actual production times 0.5. If the resulting number is above their guaranteed production level, they will not be eligible for an indemnity payment. They are also required to report this substantially lower production number for their crop insurance production, which directly impact their crop insurance safety net going forward. A top priority of MGGA has been to add a separate quality loss option which was achieved in the 2018 Farm Bill. The Farm Bill required the Risk Management Agency to establish a separate quality option that did not factor into a producers APH. This option must be entirely optional and actuarially sound. It will be available for the 2021 crop year (sign up for winter wheat producers will be in the fall of 2020). It still does not address quality issues in the current crop year; however it is a step forward. It remains a priority for the organization however developing crop insurance options is a slow process.
From the Grassroots
As rains set in in early September and continued through the month, word started to reach back to our office in Great Falls that we had an impending disaster across the state. Through our current members as well as our directors and former leaders in various areas we learned of the extensive damage to our crop quality and our producer’s profitability. This became problem #1 for the organization. How do we help our growers? Our Executive Vice President Lola Raska got to work studying all available options for recourse for our producers, she also sought concrete examples from growers and leaders in the effected areas. This is not something that is accomplished in a day, this is hours and hours of research, phone calls, emails, and reading.
A Disaster Bill and Coalition Building
As the rain was setting in in early September the details for the long-awaited disaster assistance program called WHIP+ was released by the USDA. This program is designed to help producers who have suffered from “eligible losses of certain crops, trees, bushes or vines in counties with a Presidential Emergency Disaster Declaration or a Secretarial Disaster Designation (primary counties only). Disaster losses must have been a result of hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms or wildfires that occurred in 2018 or 2019,” (from USDA press release). Lola saw an opportunity to give our producers access to some of the $3 billion appropriated for this program.
In the process of her research as well as the subsequent release of WHIP+ our office looped in NAWG’s VP of Policy, the National Barley Growers Association, our state FSA offices, the Montana Department of Agriculture, as well as our Senators and Congressman. We also reached out to other states and commodities to create a broad-based coalition who could also reach out to their contacts within the FSA.
As with most policy issues, it is never a straight line from beginning to end. While the state was supportive and some of the WHIP+ regulations published in the federal register aligned with our local issues, there is always room for interpretation and not everyone agreed with our assessment. USDA in Washington D.C. did not believe that 7+” of rain during harvest when 0.25” is “normal” in the area qualified as a flood. Our staff at NAWG had several meetings with FSA officials to plead our case. We were not able to get a commitment from those meetings however we continue to be in contact with FSA and continue to provide feedback.
We then moved to involve our crop insurance expert, a lawyer who specializes in crop insurance, federal crop programs, and other related litigation and legislation. He worked with our policy staff to craft a letter to USDA Secretary Sonny Perdue on behalf of various organizations (and by extension our members). The draft letter was sent out for edits and comments to various organizations and individuals who represent sunflower, soybean, canola, dry bean, barley, wheat, and dry pea & lentil growers as well as National Farmers Union (who have a significant presence nationwide – but especially in equally as hard hit North Dakota).
Continuing Efforts and Communication
In the mean time the USDA had announced that they were allowing Southern Plains winter wheat producers who had been unable to plant their 2019 crop in the fall of 2018 due to excessive moisture (not floods) to utilize WHIP+ because a separately announced “top up” crop insurance payment for 2019 prevent plant acres was not applicable to them. This provided us an example to use of the USDA providing WHIP+ payments to producers with crop damage or impacts from excessive moisture unrelated to flooding.
The letter was officially signed off on by all signatories and sent to the Secretary on October 16, 2019. It is linked here. Our three Congressional representatives also have sent letters to the Secretary in support of our efforts as well.
In the meantime, we are still providing significant staff hours to looking at the possible payment structure, how it can be improved to accurately reflect farmers losses due to quality damage and are always looking for other possible avenues to help our producers. We are also actively seeking further concrete examples from our growers.
Update
After months of urging the USDA to use their authority to authorize the inclusion of excessive moisture into the WHIP+ program, Congress took action themselves. Senate Ag Appropriations committee moved unused WHIP+ funding from FY17 into FY19 ($1.5 billion in additional funding) and added language including “quality loss, drought and excessive moisture.” The additional funding and language should provide assistance for many of our farmers in the NE as well as sugar beet producers across Montana, North Dakota, and Minnesota. In the case of sugar beets, the money will be sent to the cooperatives to be distributed to individual producers in an equitable manner. As a note, as some have asked: why is there so much extra money from FY17? The original WHIP+ policy was authorized at $2.36 billion but was limited in scope to Presidentially-declared disasters related to wildfires and hurricanes. It is also not unusual for ad-hoc disaster programs to utilize less than they are originally budgeted for.
How the quality losses are paid is yet to be determined by the USDA, however providing the funding gets the process of rule making moving. If you think you may be eligible for WHIP+ please reach out to your local FSA office, but also be aware that it may take some time to get the program running on the local levels. We will continue to engage the USDA, FSA on a local and national level, as well as Congressional members if necessary to ensure this program is fully implemented and is as beneficial as possible for our producers.
A Jagged Path
Policy change does not simply happen in an instant, it also does not happen simply by complaining around the coffee shop. Some of the best ideas for change are developed while sitting around a table however it also takes leaders throughout the industry as well as our invaluable staff to generate change. The WHIP+ story is a perfect way to showcase how organizations such as the Montana Grain Growers Association can take a local problem, elevate it to the state and national level, involve a wide range of stakeholders, and impact national policy changes. Proper research, clear and concise messaging, industry coalitions, and direct policy requests are part of our responsibility. It is a responsibility we take seriously and put into action every day on behalf of our producers. It is also one of the best returns on investment our members can ever get from the organization. I will not benefit personally from this effort however our farm has benefited substantially from previous efforts. I am also certain that we will directly benefit from future efforts.
** As a usual disclaimer I will point out we are not always successful, or policy is not always shaped exactly how we imagined – but we will always ask, and we will always fight for the best possible outcome for our producers. We will also make sure our voice is always heard no matter the outcome.
