On September 25, 2019, the Risk Management Agency (RMA) issued a Product Management Bulletin: PM-19-05, which involves a clarification of the involvement of agricultural experts for the sugar beet policy. Section 13(f) of the Sugar Beet Crop Insurance Provisions added an early harvest factor when processors request a portion of the contracted crop be harvested early. The early harvest factor increases the yield recognized for that year’s harvest, preventing a decline in the producer’s future yields due to early harvest. The policy states that the early harvest factor is not applicable if the crop is damaged by an insurable cause of loss and leaving the crop in the field will reduce production. The Loss Adjustment Standards Handbook states that “If it is questionable whether the crop is damaged, the loss adjuster should consult with agricultural experts in the area.” RMA states that questions were raised regarding the loss adjuster’s role in determining whether the early harvest factor will apply, including whether leaving the crop in the field will reduce production and whether the loss adjuster must consult with an agricultural expect before determining damage and cause of loss.
In its “Action” section, RMA stated that determinations of cause of loss is made by the loss adjuster on a case-by-case basis. RMA also stated that the loss adjuster should work with agricultural experts in the area, if needed, to determine the condition of the sugar beets in the field, whether the beets will be accepted for processing and if the beets should be harvest early to avoid further damage. RMA stated that loss adjusters do not have to consult with agricultural experts to make determinations if the sugar beets are damaged by an insurable cause of loss and leaving the crop in the field will reduce production unless the loss adjuster is unable to make these determinations.
ANALYSIS – It appears the instructions are a bit contradictory. RMA states that the loss adjuster should consult with the agricultural expert to determine the condition of the sugar beets in the field and if the beets should be harvested early to avoid further damage but later RMA states that the loss adjuster does not have to consult an agricultural expert when making determinations of whether the sugar beets are damaged by an insurable loss and whether leaving the crop in the field will reduce production. It appears that determining conditions of the beets in the field and determining whether the beets are damaged by an insurable crop are the same, or at least significantly overlap. The determinations of if beets should be harvested early to avoid further damage and whether leaving the crop in the filed will reduce production are essentially the same or at least significantly overlap. The procedures only require consultation if it is questionable whether the crop is damaged. The simplest instruction would therefore be to require consultation when the loss adjuster is unable to make the determination necessary for application of the early harvest factor.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.