RMA ASSOCIATE ADMINISTRATOR ADJUSTS HISTORICAL COTTON LOSS IN NORTH CAROLINA

Jan 17, 2003 - Too little rain during the beginning of the growing season followed by too much rain at the end devastated the nation's cotton crops this year in many parts of the country. David C. Hatch, one of Risk Management Agency's (RMA) Associate Administrators, wanted to personally experience how the crop loss adjustments work. So Hatch joined Rain and Hail, L.L.C., a standard RMA reinsurance holder, for a visit to North Carolina cotton fields on November 18-19.

Allen Hudson, Quality Cotton Gin representative, explains to Associate Administrator David C. Hatch, why the cotton in the gin appears gray.

This year's cotton crops endured double jeopardy. Early drought followed by late flooding created what one farmer shared as his "worst year in 40 years of planting cotton." Typically, a field of cotton resembles fluffy white snow. What Hatch found in North Carolina did not look like snow. "There was very little white and lots of brown," said Hatch. "The weak condition of the stressed plants caused the brittle stems to break and splinter during harvest, turning what fluffy white cotton there was into a gray, matted, prickly mess for the gin to process."

Rain and Hail staff adjuster, L.L. Thomas, counts the cotton locks and bolls with David Hatch.

On his visit, Hatch found that adjusting cotton losses requires the tedious counting of bolls (the pod or capsule of the cotton plant) and locks (cotton segments within a boll). "I chose this crop because adjusting cotton involves more complex loss adjustment procedures than most traditional crops," said Hatch. "Unlike simpler crops, such as corn, cotton has multiple stages of growth and multiple grading factors." He found that the initial adjustment worksheet includes four pages of intricate ratings covering color, leaf, staple length, and quality.

Cramped for writing space, independent loss adjuster Leamon Gilbert, Rain and Hail staff adjuster L.L. Thomas, with David Hatch, use a vehicle hood to sort and fill out the lengthy, complex loss adjustment forms.

"I appreciate the invitation of John Joyce (Chairman of Rain and Hail) to accompany company adjustors for several days," said Hatch. "I look forward to making additional visits with other insurance providers to more fully understand the challenges our farmers and ranchers face."

Before joining RMA in September 2002, Hatch served as President of Risk International Services, a company that provided outsourced risk management and claims services to multi-billion dollar companies in the aerospace, chemical, medical products and plastics industries. New to agriculture, aside from raising horses and cattle in his youth, his North Carolina visit marked his first crop adjustment.

Hatch's primary responsibility at RMA is to manage and improve the agency's risk management tools. The lessons learned in North Carolina will help him do just that.