USDA Seeks Crop Insurance Products for Specialty Crop, Fruit, Vegetable Growers

By | March 2, 2015

The federal crop insurance program would be extended to growers of specialty crops, fruits and vegetables as well as other farmers who have not had access to policies under new rules proposed by the U.S. Department of Agriculture (USDA).

These rules would require the Federal Crop Insurance Corp. (FCIC) to increase the incentives for the private sector to develop new insurance products for specialty crops and underserved producers. In addition, the rules prioritize approval of new policies that cover fruit and vegetable producers that currently do not have crop insurance coverage. Also, the proposal includes funding for a pilot program for a new type of insurance that targets previously uninsured producers.

The changes were announced in the Federal Register on Feb. 25.

Under one of the proposals, the FCIC board would be authorized to approve an advance payment of an additional 25 percent, above the current 50 percent, of research and development costs of products that provide coverage for underserved regions or crops, including specialty crops.

One proposed rule streamlines the approval process for index-based weather insurance pilot programs that base their payments on weather parameters for specific time periods. For example, a payment may be triggered if it does not rain a certain amount in a defined area for a month. The board would be able to approve two or more of these pilot programs for premium subsidy.

The changes address provisions of the 2014 Farm Bill that were meant to expand the farm safety net.

“We are continuing our work to ensure that a wider variety of producers have access to sound risk management tools to keep themselves protected from disaster,” said Risk Management Agency (RMA) Administrator Brandon Willis.

U.S. Senator Debbie Stabenow, ranking member of the Senate Committee on Agriculture, Nutrition and Forestry, and a chief sponsor of the 2014 Farm Bill, applauded the USDA’s proposals.

She said the rules will ensure that fruit and vegetable growers have a level playing field in terms of crop insurance when compared to traditional commodity crops.

“For too long the federal crop insurance program hasn’t fully included our nation’s fruit and vegetable growers,” said Stabenow. “That’s why we fought for reforms in the Farm Bill to put these producers on equal footing with traditional commodities.”

According to the USDA, U.S. vegetable farms are largely individually owned and relatively small, with three-fourths of the 69,172 farms that produce vegetables harvesting fewer than 15 acres. However, relatively few farms account for most commercial sales of vegetables. About nine percent of operations classified as vegetable farms had sales over $500,000, yet these farms accounted for 90 percent of the value of vegetables sold by growers.

California and Florida produce the largest selection and quantity of fresh vegetables. California also produces vegetables for processing, while the Upper Midwest states (Michigan, Wisconsin and Minnesota) grow a large portion of the green peas, snap beans and sweet corn used in canning. Northwestern states (Washington, Oregon, and Idaho) along with New York supply the largest share of frozen vegetables and more than half the potatoes. Significant potato production also takes place in Wisconsin, North Dakota and Colorado. North Carolina, California and Mississippi produce more than three-fourths of the sweet potato crop. Pennsylvania and California raise the majority of the nation’s mushrooms.

 

According to USDA, the nation’s largest fruit-producing states are California, Florida and Washington. California accounts for about half of the harvested fruit acreage, Florida almost one-fourth, and Washington around one-tenth. Michigan, New York, Oregon, Pennsylvania and Texas are also important fruit-producing states.

Stabenow, a Democrat from the state of Washington, said she favors encouraging the production of fruits and vegetables with the same level of support given to row crops and traditional commodities.

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