Monsanto has sued Arkansas regulators for banning its version of an herbicide that farmers say has damaged their crops; insurance companies won’t cover farmers who’ve suffered damage

1. Monsanto sues Arkansas board for banning disputed herbicide
2. Dicamba: Who's liable?
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1. Monsanto sues Arkansas board for banning disputed herbicide

Andrew Demillo
Yahoo Finance, October 20, 2017
https://finance.yahoo.com/news/monsanto-sues-arkansas-board-banning-205312718.html

A major agribusiness company sued Arkansas regulators on Friday for banning its version of an herbicide that's drawn complaints from farmers across several states who say the weed killer has drifted onto their crops and caused widespread damage.

Monsanto asked a state judge to block the Arkansas Plant Board from enforcing a rule it adopted last year that prevents its dicamba product from being used each year from April 15 through September 15.

Dicamba has been around for decades, but problems arose over the past couple of years as farmers began to use it on soybean and cotton fields where they planted new seeds engineered to be resistant to the herbicide. Because it can easily evaporate after being applied, the chemical sometimes settles on neighboring fields.

The panel approved the restriction on Monsanto's XtendiMax herbicide in November, and several months later the state adopted a wider temporary ban that included other dicamba weed killers in response to farmer complaints. The plant board last month rejected a petition from the company to allow its herbicide to be used.

"The Plant Board's arbitrary approach also has deprived, and if left unchecked will continue to deprive, Arkansas farmers of the best weed management tools available - tools that are available to farmers in every other soybean- and cotton-producing state in the nation," the company said in its lawsuit filed in Pulaski County Circuit Court.

A spokeswoman for the state Agriculture Department said the agency did not have an immediate comment on the suit.

Farmers have also complained about dicamba causing damage on their crops in other states, including Mississippi, Missouri, North Dakota and Tennessee. Missouri banned the use and sale of three dicamba herbicides in July but lifted the ban within a week after approving new labels and restrictions for its use.

Monsanto is challenging the restrictions as Arkansas moves closer to adopting another temporary ban on dicamba herbicides for next year. The Arkansas Plant Board last month gave initial approval to regulations that prohibit the use of dicamba from April 16 through Oct. 31, 2018. The board has received nearly 1,000 complaints about the herbicide so far this year.

The 18-member board, which is made up of various members of the agriculture community, is holding a public hearing on the new restrictions next month before the plan goes to lawmakers. Monsanto said it may amend its lawsuit to challenge the new ban if it's ultimately adopted by the state.

The lawsuit comes a week after the Environmental Protection Agency announced it had reached a deal with Monsanto along with BASF and DuPont, which also make dicamba herbicides, for new voluntary restrictions for the weed killer's use. Under the deal, dicamba products will be labeled as "restricted use" beginning with the 2018 growing season, requiring additional training and certifications for workers applying the product to crops.

The new federal rules will also limit when and how the herbicide can be sprayed, such as time of day and when maximum winds are blowing below 10 mph. Farmers will be required to maintain specific records showing their compliance with the new restrictions.

Monsanto's lawsuit accuses the Arkansas board of acting outside its authority in prohibiting its herbicide's use and failing to consider research Monsanto had submitted to federal regulators. The suit also asks the judge to prevent the board from requiring it to submit research by University of Arkansas researchers in order to gain approval for herbicides in the state.

Dicamba also may be a factor in the slaying of an Arkansas soybean farmer who was allegedly shot by a worker from a nearby farm where the chemical had been sprayed. Farm worker Allan Curtis Jones, 27, is accused of shooting Mike Wallace, 55, in a confrontation over dicamba, which Wallace believed had drifted onto his farm and damaged his soybeans. Jones is set to go to trial in December.
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2. Dicamba: Who's liable?

by Emily Unglesbee
DTN The Progressive Farmer, 20 Oct 2017
https://www.dtnpf.com/agriculture/web/ag/news/article/2017/10/20/insurance-claims-denied-companies?referrer=twitter#.Weo-9sIEFVU.twitter

* Insurance claims denied as companies grapple with dicamba injury

There was no question what was to blame for the curled soybeans on the central Illinois farm in late June.

The farmer, the neighbor who made the application, even the investigator from the neighbor's insurance company, all agreed. Off-target dicamba movement was the culprit.

Yet the letter the injured farmer received months later from the insurance company was quite clear: "We do not find any negligence on the part of our insured and are respectfully denying your claim." The company concluded that the dicamba damage had occurred from volatility -- a factor beyond the applicator's control -- and that fault lay with the product, not the application of it.

DTN acquired copies of these letters, but because of the sensitivity of the situation, allowed the sources to remain anonymous.

The dicamba injury crisis of 2017 has forced many farmers and applicators to delve more deeply into the world of liability insurance, full of confusing language and important legal implications.

With Xtend soybean acreage set to swell toward 40 million acres in 2018, now is a good time to review what liability insurance does and does not cover -- and how dicamba has thrown a wrench in the works.

1. HOW DOES LIABILITY INSURANCE HANDLE HERBICIDE DAMAGE?

Most insurance companies offer a type of add-on insurance called "spray endorsements" for applicators who will be applying agricultural chemicals and want liability insurance, explained Jason Berkland, commercial underwriting director with Nationwide Mutual Insurance Company. There are two types: one for an individual farmer who only sprays his own fields and one for commercial applicators, who spray the fields of multiple growers.

2. WHAT IS COVERED?

"If an applicator is making an application of an herbicide and unknowingly allows it to move off target and it causes property damage to a third party, that most likely will be covered," Berkland explained. The off-target movement must be accidental, he stressed.

For example, if an applicator started spraying when winds were below the labeled maximum speed, but an unexpected gust of wind sent the product into a neighboring field, that would be covered.

3. WHAT IS NOT COVERED?

If a farmer knowingly operates off-label -- which is against federal law -- most insurance policies will not cover that damage, Berkland said.

"We determine 'knowingly' versus 'accidentally' through our claims investigations," he said, noting that Nationwide's investigators are all either certified agronomists or have agronomy training.

So why wasn't the central Illinois farmer reimbursed for the damage to his soybeans after his insured neighbor followed the label but unwittingly drifted dicamba into this field?

"We have a policy to defend our insured for his negligence against a third party, but if once our investigation is done and we show he did everything correctly, then the problem lies with the product and the liability with the manufacturer," Nationwide Associate Vice President of Risk Management Steve Simmons explained.

This situation -- where liability insurance claims can be denied for being both on and off label -- is somewhat unique to the new dicamba herbicides, noted Ted Feitshans, a North Carolina State University Extension professor who covers environmental and agricultural law. "Farmers are in a real catch-22 here," he said.

4. WHAT HAVE WE LEARNED FROM 2017?

Perhaps the biggest takeaway from the 2017 season is that, despite manufacturers' denials, volatility has been a significant cause of off-target dicamba damage, the Nationwide representatives said. "We're seeing most of our claims involve physical drift or volatility," Berkland said.

This is a fairly new development for insurers, who usually face herbicide damage claims stemming from tank contamination or use of the wrong chemical, Simmons added. "Herbicide drift has not been a major player for many years," he said.

These dicamba-specific issues leaves the injured party without insurance compensation, but they also leave the insured applicator open to legal trouble.

If a farmer with damaged property has his claim denied due to a product problem, such as volatility, his only recourse is to sue the applicator or the manufacturer, Feitshans said.

The insurance company will defend its insured in a lawsuit, but it is unlikely to take a manufacturer to court, Simmons added. "There is not a lot of interest in the court system that we are [compensated]," for paying for damage stemming from a product problem, he said. "The manufacturer is in a very superior position in these types of things."

5. HOW CAN YOU PREPARE FOR 2018?

Despite these unique risks posed by dicamba next year, insurance companies aren't likely to have new policies in place to address them for at least a few years, Simmons said.

"I think the insurance market will probably adapt to provide necessary coverage, but that takes time," Feitshans explained. "Insurance companies hire actuaries who determine the risk and cost of risk; if you don't have history for a product or situation, the actuary can't determine risk and its cost. So what we're doing now is developing a history for dicamba."

The Nationwide representatives did have some advice for applicators, however.

"It's important to go through the policy with an agent and know exactly what they are covered for, because it's their assets on the line," Berkland said.

This is especially true of commercial applicators, who take on a lot of the risk even with a liability policy, Simmons pointed out. "On the commercial side, they retain a majority of loss on this," he said. "It's not just the insurance company taking a hit, it's the retailer that's taking a pretty big hit."

Just because you are an individual and not a retailer or co-op, don't assume you don't need a commercial spray endorsement, Simmons added.

"We've noticed farmers are continuing to get into more custom work," he said. If a farmer gets a spray endorsement only for spraying his own crops, but then proceeds to spray a neighbor's, that coverage is no longer valid, Simmons warned. "You need to make sure you're getting the right policy."