NAWG Shapes Policy with Quality Loss Option

By NAWG President and Cass City, MI wheat farmer Dave Milligan

When wheat farmers across the country buy their crop insurance policies this fall and spring a new option will be available to them. This new Quality Loss Option will help growers who have experienced a quality loss in any of the last 10 years be able to remove that quality-adjusted yield from their Actual Production History (APH) and insure a higher guarantee. This is a big win for wheat farmers and for NAWG which has been working with our state associations for several years on making changes to how crop insurance works when problems like low Falling Numbers are experienced. For winter wheat growers, the sales closing date is soon approaching, and we urge you to check out this option.

In recent years, throughout different regions in the country, wheat growers have experienced quality loss issues. As the national representative of America’s wheat growers, the National Association of Wheat Growers (NAWG) has listened to farmers voice these issues and worked with Congress to make improvements to how quality losses are treated in federal farm programs. This work culminated in a 2018 Farm Bill requirement for the Federal Crop Insurance Corporation (FCIC) to research and develop new methods of adjusting for quality losses, which was one of NAWG’s priorities for the bill.

Following enactment, NAWG engaged with the U.S. Department of Agriculture (USDA) Risk Management Agency (RMA) on implementation of this provision which resulted in a new Quality Loss Option being announced on July 6, 2020, for the 2021 crop year. A big win for agriculture producers, the Quality Loss Option will allow a producer to replace their quality adjusted yield in their actual production history (APH) databases with their actual yield. This allows the producer’s APH database yield to increase for individual crop years in which there was a Notice of Loss (NOL) filed.

The overall impact of the Quality Loss Option is to prevent an insured producer’s guarantee from declining due to low quality in an abnormal production year when this option is selected. This optional provision provides flexibility to producers and is available regardless of whether you received an indemnity for the year(s) selected. It is an available option under Yield Protection, Revenue Protection, Revenue Protection with Harvest Price Exclusion, and APH plans of insurance.

Not only is the new Quality Loss Option a big win for producers, but also a victory for NAWG and our state associations. As an advocate for more crop insurance coverage options for producers, NAWG played a pivotal role as a voice for producers during the development of the 2018 Farm Bill. In collaboration with other agriculture associations, NAWG represents producers’ positions in Washington, D.C. When producers work with their agriculture association, it makes a difference in agriculture policy.

Farmers’ voices need to be heard in Washington, D.C., and that is where we step in. Agriculture associations have one goal: to support and advocate for our state associations and farmer members, and the evolution of this issue culminating in a new crop insurance option for growers demonstrates the value of participating in NAWG.

For more information, check out these resources from USDA’s Risk Management Agency: