AmAg mails settlement payments

This time, the checks really were in the mail. According to the law firm handling the American Agrisurance (AmAg) CRCPlus class-action suit, 2,417 settlement checks totaling $2,419,427.15 were sent out May 14. Some farmers who were class members received a check within a few days.

The ending to the suit comes after several years of legal wrangling. The suit — originally brought by Lonoke, Ark., farmer Jimmy Wallace — was filed after the AmAg insurance company reneged on promises made with its 1999 CRCPlus rice insurance. Delta rice farmers signed up for 3-cents-per-pound coverage that was, after a deluge of signups, abruptly cut by the company to 1.5 cents per pound.

Speaking after filing the suit, Wallace mentioned a CRCPlus informational meeting (such meetings occurred across the Delta) he'd attended at his local bank. “It didn't take a rocket scientist to realize that the product was a good deal for farmers. It was the only thing I saw that was based on price, not production. It offered 3 cents per pound. That was promising because rice prices were going down at the time. I'd say everyone in the room — 75 to 80 people — immediately wanted to sign up.”

When the company suddenly cut the 3-cent coverage in half, the action didn't sit well with the government. Farmers, who had already made their growing plans and secured loans by March when AmAg announced the coverage slash, were incensed.

“We were all upset. It looked like such a good deal — I think it guaranteed me $3.84 per bushel of rice. When they yanked it away, they didn't offer anything worthwhile to fill the void they'd made. Believe me, had the shoe been on the other foot, say the rice price had gone up to $6 per bushel, they'd have been here with a hand out saying, ‘Pay me my premium,’” says Wallace.

AmAg eventually paid substantial fines to both federal and state agencies.

Wallace's suit, which alleged fraud and deceptive practices, among other things, was settled July 5, 2000. Then came the arduous process of calculating who got what. All farmers who signed up for CRCPlus coverage were eligible for a cut of the $3.7-million settlement (by the time attorney and “special master” fees were removed, the pot for farmers to share was down to $2.3 million).

The judge overseeing the case appointed a special master to determine what each claimant should receive. Checks were promised last October. But after reviewing the special master's initial report, class attorneys discovered “what we thought were miscalculations and a couple of errors.”

“We went to the judge and told him our point of view on that. The judge sent it back to the special master to recalculate with some instructions. The special master did that and sent his new calculations to the judge who approved them. We received a copy of the order, had the checks printed and sent them out,” says Cindy Green, class counsel.

Farmers who have called Delta Farm Press to speak about the checks have been generally positive. “To be honest, after all this time, I wasn't expecting a check at all. We got a few hundred dollars, which isn't a whole bunch of money. But I think it was fair,” says one.

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