Judge Rejects Farmer Insurance Request

Magistrate Rules Against Indicted North Dakota Farmer's Request for Crop Insurance

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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A federal magistrate in North Dakota on Wednesday rejected a request by a farmer for a temporary restraining order against USDA that would allow him to buy crop insurance this year. The farmer was indicted last August over crop insurance claims involving his potato crops in 2017 and 2018, though he has continued to both buy crop insurance and receive disaster payments on his crops even after the Risk Management Agency began an investigation. (DTN file photo)

OMAHA (DTN) -- With the crop insurance deadline hitting, a federal magistrate Wednesday rejected a North Dakota farmer's request for a temporary restraining order that would have allowed him to buy crop insurance for his spring crops.

Attorneys for Darren Tronson and his farm, DL Farms LLC, had asked U.S. Magistrate Judge Alice Senechal for a temporary restraining order that would allow him to continue buying crop insurance this year for his crops. Senechal held a hearing on the restraining order Tuesday. On Wednesday, she filed a 12-page ruling rejecting Tronson's request.

Tronson and his farm entity, DL Farms LLC, received a notice of suspension from participation in federal farm programs on Jan. 12 based on a criminal indictment against Tronson tied to crop insurance indemnities paid in the 2017 and 2018 crop years.

USDA's Farm Production and Conservation (FPAC) agencies decide how many farmers are suspended on an annual basis from buying crop insurance. While crop insurers sell more than 2.2 million individual policies annually, over the past decade USDA has temporarily suspended 93 total farmers from buying crop insurance, including nine producers in 2022.

USDA stated that a suspension is "not intended to be punitive. Instead, these actions are taken to protect the federal government and taxpayers alike."

On his farm in eastern North Dakota, Tronson grows potatoes, corn, dry beans, sugarbeets, wheat and soybeans.

Tronson argued in the lawsuit that suspension in federal crop insurance "will no doubt result in irreparable harm to DL Farms LLC and Tronson -- a fifth-generation farmer" who has been farming for 38 years.

In a civil claim filed against Tronson last July, the federal government was seeking to recover up to $2.6 million from crop insurance claims on his potato crops.

Tronson was indicted last August by a federal grand jury for three counts of filing false statements on his crop insurance claims. The indictment, however, only pertains to crop-insurance claims for Tronson's potato crop and doesn't involve any of the other crops he grows.

During Tuesday's court hearing by telephone, one of Tronson's attorneys, Michelle Donarski, told Senechal that if Tronson was unable to sign up for crop insurance that would limit the crops he could grow on his farm to crops that were insured last year.

The other major concern facing Tronson with the indictment he is now on the U.S. Treasury Office of Foreign Assets Control (OFAC) sanctions list, Donarski said.

"The impact of having him on that list is that his banks will no longer do business with him," she said. She added, "He can't even get an operating line of credit."

Even as RMA was investigating Tronson, until this year, he had continued to be able to buy federal crop insurance policies and received indemnity payments for crop losses as well as disaster payments, Donarski said.

"Darren has received crop insurance every year since then. He has filed claims and they have been adjusted."

Donarski did not reply to an email seeking comment on the case.

Melissa Burkland, an assistant U.S. attorney in North Dakota, told the magistrate that crop insurance "is not an entitlement program, it's government insurance." She added the government believes Tronson has lied about his crop insurance claims over multiple years. The federal government also shouldn't have to accept the risks of insuring someone under indictment for fraud.

"At some point the government -- particularly when there's been an indictment issued -- can say we don't want to reinsure this farmer. We've lost too much money doing this," Burkland said.

The federal government accused Tronson of planting fewer seeds and applying less fertilizer than recommended by the North Dakota State University Extension Office to achieve the yield equal to the county T-Yield of 205 cwt potatoes per acre. The indictment maintains Tronson saved significant costs than otherwise required if following good-farming practices.

In the 2017 crop year, comparable non-irrigated potato yields were more than 300 cwt potatoes per acre while Tronson's yields were approximately 20 cwt potatoes per acre. In 2018, other producers in Grand Forks County produced an average of 229 cwt potatoes per acre while Tronson's farm produced approximately 60 cwt potatoes per acre.

The indictment also cited that Tronson continually minimized inputs by moving his potato production around to new lands and using different potato varieties so his crop insurance would be based on the county T-Yield rather than his Actual Production History (APH). The indictment cited Tronson established 46 different APH databases through 2018. His average production was 41 cwt per acre while the county T-Yields were 189 cwt per acre.

Relying on that T-Yield rather than APH, the indictment cited that Tronson had been paid approximately $5.7 million in indemnities for potatoes since 2000.

Tronson, DL Farms and the federal government have gone back and forth with civil cases in recent years. Tronson had filed civil complaint against USDA, RMA and the Federal Crop Insurance Corp., in July 2021 requesting a court review after RMA had first determined that DL Farms had failed to use good farming practices. That issue hinged on RMA claiming Tronson did not apply recommended levels of phosphorus and potassium to his 2019 potato crop.

Prior to the indictment, the Justice Department, on behalf of USDA, filed a civil case against Tronson and DL Farms as well. The criminal trial for Tronson's case has been continued until March 12, 2024, with attorneys for both Tronson and the federal government stipulating in a February court filing that they "will more than likely resolve this criminal case without trial" following the resolution of the civil case.

In an affidavit, Tronson also pointed out that in 2021 he received disaster payments for soybeans, potatoes and dry beans. Under the rules of disaster aid, farmers who receive disaster payments are required to buy crop insurance policies for those commodities over the next two years or repay those disaster payments as well.

Tronson also added in his affidavit that without crop insurance he would not be able to grow potatoes, dry beans or soybeans in 2023. He would be left with growing corn and wheat. "But even then, my crop will be uninsured through at least the 2024 crop year."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

Chris Clayton