Soybean Rust Threatens Nine States, Farmers Rethinking Coverage Choices

By | March 7, 2005

A warning to prepare for the worst and hope for the best has been issued by researchers who discovered late last year that when Hurricane Ivan tore across the southeastern U.S. it brought with it wind-borne soybean rust spores. Soybean rust promises to bring headaches to insurance companies with policyholders in at least nine states: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Missouri, South Carolina and Tennessee.

Experts are advising soybean producers to take care of their own risk as best they can, but if they felt in the past they were unlikely to have an insurable loss, they may need to rethink that position.

There are two kinds of crop insurance: crop-hail, provided by the private sector; and multiple-peril, an all-risk coverage underwritten by the private sector and the federal government and serviced by the private sector.

Crop-hail insures against the loss of value of a crop as a result of damage by hail. Multiple-peril insurance covers the loss of crop value as a result of all types of natural disaster, including drought, excessive moisture and unusually hot weather.

In recent years there have been sweeping changes in the federal multiple-peril crop program. Until 1995, only about one-third of farmers bought federal multiple-peril crop insurance because, in the event of a disaster, they could rely on Congress to bail them out with disaster assistance and emergency loans.

Recognizing the disease
Soybean rust is a fungal disease that attacks the foliage of a soybean plant causing the leaves to drop early, which inhibits pod setting and reduces yield. The amount of damage depends on how early infection occurs in the growth of the soybean plant. In its early stages it can resemble other plant diseases. Initial infection usually is first evident in the plant’s lower canopy. Soybean rust can survive on as many as 100 different hosts.

Soybean producers must decide by March 15 if they want to insure their crops against loss in 2005 from soybean rust or other causes,” Ray Massey, University of Missouri agricultural economist said. “The U.S. Department of Agriculture Risk Management Agency states that “losses due to soybean production due to soybean rust disease is an insurable cause of loss.”

“With regard to rust, crop insurance actually becomes a better buy than it has been in the past,” Massey said. Even if a farmer has insurance, Massey said it is necessary to verify that rust outbreak was natural and that appropriate control measures were taken.

“The major impact of soybean rust may be that it causes farmers to rethink their crop insurance choices rather than just take the same level of coverage they’ve had for the last several years,” Massey explained.

In 2003, 75 percent of Missouri’s soybean acreage was insured and for the past five years, Missouri farmers have received more than $2 for every $1 paid in premiums. Data for 2004 is not yet available.

“Soybean rust survives in living plant material, so it can only live through the winter in the southern tip of Texas or Florida, places which have already had hard freezes this winter,” Dr. Laura Sweets, a plant pathologist with University of Missouri Extension said. She advised producers to scout their fields and to watch the weather to see if southern winds might blow the disease spores north.

In November 2004 soybean rust was discovered in both Louisiana and Arkansas. A sample collected Nov. 18 in northeast Arkansas near the Mississippi River was identified with the disease. In Louisiana, samples from three parishes–Iberia, St. John and St. Mary–were confirmed Nov. 16 to have the fungal disease.

The Arkansas Soybean Promotion Board, a state agency, said in an announcement that Arkansas and other states have 2005 response plans in place for combating the disease. They include approving new fungicides, winter training of field scouts for 2005, a crop monitoring program and detection network, and the distribution of information about the disease.

The Louisiana Department of Agricul-ture and Forestry confirmed samples found in that state arrived via wind-borne spores brought from South America by Hurricane Ivan.

“The sample locations indicate a path that matches the wind patterns of Hurricane Ivan,” stated Dr. Clayton Hollier, a Louisiana State University AgCenter plant pathologist and its principal investigator for the Southern Pest Detection Network.

Traveling north
“Soybean rust is right on our doorstep,” Richie Farmer, Kentucky Agriculture Commissioner said. “We are fortunate that it appeared when the state’s soybean crop was already in the bins.”

While soybean rust has not appeared in Kentucky yet, it has been reported in Missouri and Tennessee, Bill Clary, a spokesman for the Kentucky Department of Agriculture told Insurance Journal. “We would not be surprised to see it make an appearance in Kentucky in 2005.”

University of Kentucky plant pathologist Don Hershman said agriculture insurance providers in Kentucky are aware of the impending disease.

“The chances are very high that Kentucky will experience rust at some level,” Hershman explained. “If you can see it, it’s probably too late.”

Soybean rust statistics given by Hershman to local farmers are quite sobering.

“For most diseases, the loss in yield is somewhere around 30 percent,” Hershman said. “With rust, yield loss can be as high as 70 to 80 percent.”

The economic impact adds up. Some of the proposed preventative maintenance can cost farmers as much as $15 to $28 per treatment an acre. The measures would include spraying fungicide as many as three times. Additionally, the excessive spraying may curtail crop yields by as much as 10 percent.

“Finding Asian soybean rust in this country means farmers will have to make changes in their soybean management practices,” Dr. Ken Whitam, LSU AgCenter plant pathologist, said.

Experts advise farmers concerned about the impact of soybean rust on their crop insurance indemnities to talk to their crop insurance agent about good farming practices.

Under the terms of the Common Crop Insurance Policy, a practice is considered a good farming practice if agricultural experts agree the production method used will allow the crop to make normal progress toward maturity and produce at least the yield used to determine the production guarantee.

Insured producers should follow developments on the identification and spread of the Asian soybean rust disease, and stay informed and updated concerning appropriate treatments that may apply to their situation.

Topics Louisiana Agribusiness Kentucky Arkansas Missouri

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Insurance Journal Magazine March 7, 2005
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