Contact: Wes Climer (202) 225 2576

Washington, Nov 15, 2007 - Congressman McHenry has sent a letter to Acting Secretary of the Department of Agriculture Chuck Conner urging him to improve the quality of crop insurance available to Tenth District farmers from the Department of Agriculture.

Under current guidelines, the Department of Agriculture offers insurance benefits to farmers whose crops are totally dead.  However, many Western North Carolina farmers haven’t reached that threshold of destruction because of the unique nature of their crops.

Perennial crops like Christmas Trees and ornamentals, which are common in the Tenth District, don’t necessarily have to be totally devastated for their growers to experience substantial financial hardship in the wake of natural disasters like floods and droughts.

“While losses of this nature are not currently covered, they are just as financially devastating as the total crop losses felt by annual crop produces.  Therefore, due to the unique nature of perennial crops, many of my constituents find themselves in the position of paying out premiums for insurance that provides them no coverage in the event of natural disasters,” Congressman McHenry said in the letter.

To remedy this shortcoming, Congressman McHenry has now requested the Department of Agriculture to provide value loss adjusted coverage for affected growers, which better accommodates the unique circumstances facing many Western North Carolina farmers.

The Congressman’s letter to Acting Secretary Conner is below.

Acting Secretary Chuck Conner
U.S. Department of Agriculture
1400 Independence Ave., S.W.
Washington, DC 20250


Dear Acting Secretary Conner,
            
            I write to you regarding concerns about current crop insurance coverage offered by the Department of Agriculture.  In particular, the current suite of crop damage programs, from Multiple-Peril Crop Insurance (MPCI) to Noninsured Crop Disaster Assistance Program (NAP), fail to provide the coverage needed to address the dominant form of loss incurred by one of the key agricultural industries in the 10th Congressional District – Christmas tree growers, ornamental growers, and nurserymen. 

            Current programs require plants to be completely dead in order to trigger coverage eligibility.  Because the majority of crops in these industries are perennial, natural disasters such as drought, flood, hail, and frost do not necessarily result in a total crop loss.  More often than not, these events lead to damaged crops that require additional expense to rehabilitate.  In some cases, the damage and resulting substantial expenses needed create a delay in getting products to market for years.  While losses of this nature are not currently covered, they are just as financially devastating as the total crop losses felt by annual crop producers.  Therefore, due to the unique nature of perennial crops, many of my constituents find themselves in the position of paying out premiums for insurance that provides them no coverage in the event of natural disasters.

            I ask you to consider addressing this program shortfall by offering value loss adjusted coverage for growers.  While such coverage may add some additional costs via increased claims, it seems likely that those costs would be greatly offset by a decrease in low interest disaster loans sought by perennial growers.  As it stands now, growers have no option other than incurring more debt to be serviced by the federal government to recover from this type of loss.  The debt servicing and default risk associated with those situations are detrimental to the Department of Agriculture’s bottom line as well as the growers’ chances of remaining in business and being a vital economic component of the 10th District of North Carolina.

Sincerely,


Patrick McHenry
Member of Congress