Ranchers: USDA not paying out on policies

Argen Duncan

A number of New Mexico ranchers say the U.S. Department of Agriculture isn’t giving them the insurance payments they paid for and need.

Last year, the USDA Risk Management Agency offered a pilot program in which ranchers in New Mexico and other states could work with private insurance companies to buy policies they expected to pay out claims in case of drought. Now, in the midst of a drought so severe that Roosevelt and other counties have been declared disaster areas, ranchers said the Risk Management Agency tells them their pastures have too much vegetation to receive the money.

Ross Caviness, who raises cattle near Causey and took out one of the insurance policies, said he didn’t receive a payment for February through April and fears he won’t get one for March through May. Payments come 60 to 90 days after the selected three-month period.

“We’ve had no rainfall, don’t have any green grass, and they say I’m 120 percent above normal (in amount of vegetation),” Caviness said. “I don’t believe it.”

New Mexico Farm and Livestock Bureau Executive Vice President Matt Rush, a Roosevelt County native, said producers were told pay-outs would be determined by the greenness of pastures as seen on satellite images. They had to sign up by Sept. 30, 2010, to participate.

In November 2010, Rush continued, a USDA newsletter mentioned that claims would be decided based on biomass, anything growing in the pasture whether or not it’s good for grazing. Most producers didn’t know about the biomass condition until their claims were denied, he said.

Pat Engel, Risk Management Agency director of legislative and external affairs, said she wasn’t a policy expert, but the term “biomass” was always used. She wasn’t sure what hadn’t been explained.

“There was not a change,” she said.

Caviness said he asked if the scrub oak on his pasture would count against him, and the USDA representative replied that the oak and old grass wouldn’t affect the greenness measurement. Now, he said, the USDA tells him the old grass is what keeps him from getting a payment.

Approved claims could pay from $80,000 to $100,000, Caviness said. He spent $20,000 on a year of the insurance.

Rush said New Mexico producers, most on the east side of the state, took out 95 policies and, by Aug. 8, had paid more than $1.6 million in premiums. Two claims had been paid for a total of $2,007, he said.

“What bothers me the most about this is the people who work day and night to provide us with food and fiber supply are having to fight against the government agency designed to represent them, take care of them, protect them, and it’s just not right,” Rush said.

Rush is scheduled to meet with the administrator of the program Aug. 29, and Risk Management Agency administrator William Murphy and a policy expert are to meet with producers in Albuquerque, probably around Sept. 1.

Engel said the solution depends on the outcome of the Albuquerque meeting.

“We’re committed to continuing our discussion with producers and producer groups on how this program can be improved,” she said.

USDA representatives understand these are hard times for agriculture and are committed to using their resources to reduce the impact of the drought in New Mexico, Engel said.

New Mexico’s Congressional delegation is working to help, Rush said, and he’s trying to identify everyone in New Mexico how took out a policy.

Meanwhile, Caviness said he would have used the insurance money for cattle feed.

“Next week, we’re going to start selling cows,” he said Friday. “We’re out of grass.”

Caviness said he had to let one of his two employees go as well. Nonetheless, he said he thinks the problem would be resolved.

Ranchers participating in the insurance program can call Rush at 575-532-4707 to identify themselves and be included in Farm Bureau representation.