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Sutter County Farmers Grappling with Impending Floor Insurance Rate Increases

Tuesday, October 1, 2013


For Sutter County farmers grappling with impending flood insurance rate increases and draconian building restrictions, the only certainty is uncertainty.

On top of regulation that prohibits the construction of new structures, Sutter County farmers are now facing massive insurance rate hikes from the Biggert-Waters Flood Insurance Reform Act of 2012.

In short, an industry already facing its share of issues is bracing for another hit.

Local leaders are lobbying congressional representatives and seeking reform for the series of policies that could strangle the local agriculture industry.

"From an agricultural perspective, the answer is yes, this will have a significant consequence on us and will have negative impacts," said Tara Brocker, a Sutter County farmer. "We're working hard to get exemptions for agriculture, but that hasn't happened, and we don't know if it will happen."

For Brocker, the problems started in 2008. That was the year the Federal Emergency Management Agency, flush with debt from rebuilding efforts after hurricanes battered Louisiana, started re-mapping floodplains while requiring areas to demonstrate 100-year flood protection.

The Sutter County levees failed this test, prompting FEMA to regard the area as unprotected and a flood risk.

For Brocker, and every other farmer who had borrowed money through a federally backed source, such as a mortgage, this meant that she was now required to insure every structure on her farm.

Now, instead of insuring only her house, she was insuring her barn, her shop and her office.

"That's been a tremendous burden," Brocker said. But not only had her costs increased as a result of the new floodplain designation, her ability to expand her farm, and thereby increase revenues to cope with the elevated cost, was simultaneously crippled by building restrictions.

Typically, FEMA wants to discourage development in floodplains. The lower the value of the property, the lower the flood risk, so in areas without 100-year protection, FEMA does not allow the construction of new structures unless they are built one foot above the flood base elevation, which can be upwards of 10 feet in parts of the county, said Dan Peterson, water resources chief of Sutter County.

The problem for area farmers is that agricultural-use structures were lumped in with the type of development that doesn't belong on floodplains — commercial and residential development, said James Gallagher, a Sutter County supervisor.

As technology improves and agriculture becomes more efficient, farmers are left with no recourse to expand their operations to keep pace as the industry evolves, said Lewis Bair, general manager for Reclamation District 108.

"Farmers are using GPS now and have higher horsepower tractors and can harvest faster. So, some farmers are looking into adding an additional rice drier, but they can't get the permit for it," Bair said. "The ability of agriculture to adapt and be competitive is caught in the middle of this thing."

And with the insurance rate increases on the horizon as a result of Biggert-Waters, these restrictions will only aggravate the problem, Bair said.

Farmers could be facing insurance rate increases seven times their usual rate, Peterson said. But with the building restrictions, they are left with a barren toolbox with which to combat the problem.

"If they're trying to reinvest in their infrastructure, there are building restrictions, and unless there's a change in federal policy, it will be very devastating to our farmers," Gallagher said.

"I worry that agriculture is slowly being strangled, and these changes could make it a much less viable place to farm," Bair said.

FEMA urged to change designation

Facing a series of sweeping policy shifts in floodplain designations and flood insurance rate hikes, local leaders are seeking federal reform to mitigate the potentially crippling impact of these changes.

Their main goal is to get the Federal Emergency Management Agency to establish an agriculture zone as a floodplain designation, said James Gallagher, a Sutter County supervisor.

This new designation would allow less than 100-year flood protection, while keeping flood insurance rates low and allowing for the construction of agriculture structures, which are restricted by regulation that requires a building to stand one foot above the flood base elevation — a standard that is not attainable for many farm structures.

"We're making the case that you want to make sure agricultural is viable in a floodplain — that that's the best use for a floodplain," Gallagher said. "If you put in regulation that makes it hard to build farm infrastructure, we can't farm it. We should be allowed to invest in our agricultural infrastructure."

Most of the lobbying is being done by the Agricultural Floodplain Management Alliance, a national organization of which Sutter County is a founding member.

The group has also commissioned a study through the federal Government Accountability Office to study the impacts of changing National Flood Insurance Policy rates on agricultural areas.

"We believe that will show there's a very devastating economic impact, and we can use that as the catalyst for further policy changes," Gallagher said.

The group is also trying to educate FEMA about the differences between agricultural basins and other floodplains, stressing the fact that the county does have a levee system (although it does not provide 100-year protection to unincorporated Sutter County) and that with less protected structures, the risk is lower, Gallagher said.

"All those things need to be given credit, but under Biggert-Waters, that's not taken into account at all," Gallagher said. "It's a one size fits all system. We'll pay the same rate as areas that don't have levees. Their risk is much higher than ours is, but we all pay the same exorbitant rate."

The problem is, floodplains in California are different than other parts of the country, said Lewis Bair, general manager for Reclamation District 108. Whereas, in traditional river flood basins, the river is the low point and the flood likelihood decreases as the distance from the river increases, in California, the river is the high point, so when the river breaks, the whole valley is flooded, Bair said.

"The system is broken there. Our problem is that it's a problem acute to California, and it's a national policy that needs to be tweaked," Bair said. "National policy has to work here and everywhere else, so it's tough to get a lot of movement on reform."

Federal fix stalled over budget battle

One piece of federal legislation that could mitigate the impacts of flood insurance rate impacts is stalled in Congress as lawmakers are in a deadlock by efforts to halt the Affordable Care Act, also known as Obamacare.

The proposed legislation would defund the Federal Emergency Management Agency's ability to implement rate increases from the Biggert-Waters Flood Insurance Reform Act of 2012.

"Biggert-Waters passed, and once FEMA looked at the rates, everybody realized that it wasn't going to work and would be unaffordable for homeowners," said Kristi More, federal director for the Agricultural Floodplain Management Alliance. "But nothing has really moved along the legislative process this year."

When Congress moves past the budget issues, involving the routine funding of thousands of government activities, it will start to look at new spending bills, and the alliance can go after the de-funding effort, More said.

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