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Vilsack stiffs New Mexico ranchers on drought insurance

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posted on Aug, 20 2011 @ 11:12 PM
Vilsack, head of the USDA, introduced a government sponsored insurance program - handled by private insurance companies - and sold it to farmers as drought insurance. The problem is, the payout criteria are nearly impossible to meet and were not clearly explained.

And because the drought in New Mexico is so bad, many farmers jumped at the opportunity:

“On the ranch we have not had significant rainfall to grow grass in the last two years. As a result, everything on the ranch is basically barren,” he said.

Porter said he has been buying feed since December 2009 for his herd due to dry conditions, saying “it’s been a significant drain on the pocketbook.”

Porter said he has had to sell off some of his herd. He said the policy “would help offset some of the cost of feeding and help us manage the drought.”

But, the payouts on the policies are based on a "greenness index" using satellite imagery and that imagery shows the greenness has not dropped below the necessary level.

The problem is that satellite information — which counts all “biomass” including trees and weeds in its greenness index — indicates New Mexico is green even though ranchers are facing severe drought, said Matt Rush, executive director for the New Mexico Farm and Livestock Bureau.

So, the farmers thought they would be recouping some of their costs, but they are still in the same boat as before they purchased the policies, although the insurance companies have collected some nice premiums:

New Mexico ranchers have paid $1.64 million in premiums and have received only two payouts totaling $2,007, according to USDA’s Risk Management

The government spin:

The Risk Management Agency, which oversees the program, says the policies are not drought insurance; rather, they are “insuring a decline in the vegetation/greenness index,” Michelle Bouchard, a spokeswoman with the agency, told the Journal. The policies are sold by private insurance companies.


But, they were sold as drought insurance -

Porter showed the Journal a handout from a presentation given to a group of ranchers in Estancia in July 2010 that used the term “drought insurance” in its title. The presentation was given by a private insurance company, but a USDA agent was present, Porter said.

I wonder how much of those premiums will be given to Obama's re-election campaign?
edit on 20-8-2011 by Maluhia because: (no reason given)

posted on Aug, 21 2011 @ 01:05 AM
Seriously, can these thieving bastards get any worse? There's no way this could have been a mistaken understanding on the USDA's part. This is about as low and rotten a thing as anybody can do. Can you imagine? Basing it on a satellite "greenness" index?

posted on Aug, 21 2011 @ 07:30 AM
reply to post by Maluhia

Quick question.

Did the USDA provide information about the index beforehand? In other words, was it like if you meet these requirements you may be eligible for insurance payout. Check here to see if you qualify. Stuff like that..

Also, they may want to have that imagery checked to see if it has been updated. Plus, if they had any fire issues on their lands, they may want to have their claims reviewed.

edit on 21-8-2011 by Nephalim because: (no reason given)

posted on Aug, 21 2011 @ 09:46 AM
I'm trying to find more information on your question, but I'm sure the policies were written in the usual confusing language - which was not clearly explained by the private insurance providers.

Bouchard acknowledged that, "it's a very confusing, highly technical insurance product. That's why we have disclaimers."

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