Stating there had not been enough trades on the durum futures market to calculate a price, The Federal Agriculture Department is asking a judge to throw out a lawsuit filed by farmers who claim the government unfairly stopped offering insurance for durum, a wheat variety used to make pasta.
According to the Associated Press, in court papers, the government contends the so-called “crop revenge coverage” policies were discontinued for durum wheat last spring because it could not determine a base price – the lowest price at which farmers would be protected. The North Dakota durum farmers who brought the case contend the government could have set a price if it had studied a longer period of futures transactions.
The farmers are asking for a court order reinstating the crop revenue coverage, which protected them against low prices and poor crop yields. A base price is a key component to the protection.
U.S. District Judge Rodney Webb has not ruled on either request.
The USDA’s Risk Management Agency informed insurance companies and farmers in March that it would not make available crop revenue coverage for durum.
The decision to remove the durum policies came less than two weeks prior to the deadline for farmers to sign up for coverage.
The government said the farmers had other options, including insuring their durum under policies for spring wheat, which typically sells for less than durum.
In 1999, durum farmers captured a $41 million judgment against the government over their claims that terms of the crop revenue policies for durum were unfairly changed. Approximately 8,400 farmers around the country obtained checks over the next two years.
Topics Lawsuits Agribusiness
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