Mitigating Pesticide Drift Damage Through Crop Insurance

Despite all the technological improvements and increased regulations, pesticide application is not always perfect. Pesticide drift, aka off-target application, aka chemical trespass, resulting in crop damage and yield loss continues to create claims and litigation between neighbors. In many cases, proving whether a chemical trespass may be straightforward. However, proving economic losses are generally more difficult and may encompass losses that extend beyond the crop year.No matter what it is called, damages from negligent pesticide application are not considered an insurable loss under the multi-peril crop insurance policy. Therefore, the producer must seek compensation from the applicator to recover any present and future yield loss. However, a producer also needs to consider how the yield loss will negatively affect the producer’s future crop insurance benefits. Specifically, a yield loss will reduce the producer’s Actual Production History (“APH”), which will negatively affect the producer’s guaranteed yields over several years. In extreme cases, a zero-yield production caused by pesticide drift may be catastrophic to a farming operation if the yield average drops below an economically feasible insurable level.While calculable, collecting on the reduced yield average is not be automatic. In any civil action, the injured party has a duty to mitigate their damages. Any damages which could have been prevented by the injured party after the negligent act may not be recoverable.The Risk Management Agency (“RMA”) has provided a means to mitigate the negative effects of pesticide drift on the producer’s APH. Pursuant to 1309 (G) of he crop insurance handbook, “the insured may choose to not include an actual yield or acres for the damaged acreage in the APH database and as a result reduced yields due to Third Party Damage will not impact the insured’s approved yield.” The insured must notify their insurance company in the form and within the time frame outlined in the policy and the appropriate Loss Adjustment Manual (“LAM”). The company must also determine that the cause of loss was attributable to the actions of a third party. As always with crop insurance, the burden is on the insured to prove the damage was due to the actions of a third party. The loss will be treated as an uninsured cause of loss and counted against the producer’s APH if the producer fails to comply with the notice and proof requirements.Failure to utilize the RMA’s mitigation provision, will also allow the negligent applicator to argue that the producer failed to mitigate his/her damage which may leave the producer without a remedy. Consequently, a producer has to be diligent with determining the damages caused by negligent pesticide application and the means of mitigating such damages.