The Diversion Authority has approved the development of an Agricultural Impacts Mitigation Plan, which includes providing flowage easements and supplemental crop insurance for lands impacted by the proposed F-M Area Diversion Project.
The Plan goes beyond the minimum federal requirements, which are limited to purchasing flowage easements. The Plan indicates that the Diversion Authority will also provide crop insurance. These features of the Plan will help mitigate the impacts from operation of a key component of the Diversion Project: the upstream retention or staging area immediately south of the Project’s southern embankment. The staging area will temporarily store flood waters on agricultural land to mitigate downstream impacts during times of excessive flooding.
Analyzing the Options
To assist in identifying and analyzing specific crop insurance options, the Program Management Consulting team of CH2MHILL and AE2S will retain the economic consulting firm Watts and Associates, Inc. (W&A) to prepare an initial options paper. The initial options paper will outline six different options to address the impacts. W&A specializes in crop insurance development, agricultural finance, agricultural risk analysis and econometric consulting, and is based in Billings, Montana.
The firm will identify advantages and disadvantages of each crop insurance option, potential implementation costs, and expected timeframes for full product development. It is expected that an initial options paper will assist the Diversion Authority in making a decision on which option(s) to pursue further in a subsequent phase.
The following are key factors for evaluation regarding flowage easement and supplemental crop insurance for impacted lands:
- The determination of the value of a flowage easement on an individual property will follow the Federal/USACE process and will be determined by a “before and after” appraisal.
- Factors considered during the flowage easement appraisal process include depth, duration, and frequency of additional flooding, and highest and best use of the property.
- The value of a flowage easement will vary depending on the location of the property, magnitude of impacts, and future risks to the property.
- Flowage easements will be acquired by following USACE policy, which defines a one-time payment made at the time that the easement is acquired.
- Flowage easements will allow farming to continue on properties; however, development will be limited.
- Offering crop insurance is not required mitigation. The Diversion Authority wishes to go beyond the federal requirements in order to better mitigate impacts to agricultural lands impacted by the Project.
- The Diversion Authority will study supplemental crop insurance options, including a private supplemental insurance policy as well as a federal insurance product. The study of options is expected to lead to the development of a supplemental crop insurance program.
- The Diversion Authority may contract with an independent insurance provider to administer the coverage and damage adjustment process.
- The supplemental crop insurance policy would be expected to cover “prevent plant” scenarios where Project operation would prohibit planting.
- The supplemental crop insurance policy would be expected to cover damages caused by Project operation to planted crops (summer impacts).
- Federal crop insurance will likely apply if a crop can be planted before the established late planting dates.