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2005 disaster payments withheld from corn producers

Texas Corn Producers Board (TCPB) learned this week that 2005 disaster payments involving corn claims in Texas where aflatoxin was reported as the primary or secondary cause of loss are being held up due to a compliance case that is under investigation by the USDA Risk Management Agency (RMA).

Currently, an estimated 845 corn producers are subject to delay in receiving their 2005 disaster payments.

After visiting with the State Farm Service Agency (FSA), David Gibson, executive director of TCPB, stated producers should soon be expecting information in the mail or in their county FSA office pertaining to their payments if they elected to receive disaster payments based on the 2005 crop year.

“Producers are advised to work closely with their county FSA office as more information is released pertaining to how the issue will be resolved,” Gibson commented. “Again, this only involves corn producers who selected the 2005 crop year for disaster payment with aflatoxin as a primary or secondary reason for crop loss.”

Texas corn producers affected by the payment withholdings are in counties ranging from north of Dallas to the Rio Grande Valley, which is an area prone to aflatoxin problems.

Upon visiting with RMA and the Texas State FSA office, TCPB was informed that once the investigation is completed and approved through the proper channels, payments will be issued by FSA.

Gibson said he is concerned with the fact that the investigation by RMA has been going on for over a year with the possibility of taking as long as three to five years before a resolution is made.

“The timeliness of this investigation is detrimental to corn producers who are waiting on payments for crops harvested two and half years ago,” Gibson said. “Since the fall of 2005, TCPB and producers across the state have been working with RMA and crop insurance companies on this issue. Some of the last producers to receive 2005 insurance payments got them in December of 2007.

Gibson said all producers' disaster payments involving aflatoxin losses are currently being held up because of the investigation that was started at that time by the RMA. Issues dealing with crop insurance rules are adding to the delay in getting money out to producers.

Producers who have already received some 2005 disaster payments for aflatoxin losses should also be aware that they may be operating under the stress of possibly having to forfeit some of their payment pending the outcome of the investigation.

TCPB encourages producers to closely evaluate options presented to them at their county FSA offices, who along with the State FSA, are working diligently to bring this issue to a close. TCPB continues to work with the State FSA office, the Texas congressional delegation and RMA to resolve the issue as timely as possible.

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