Written by John Shea
Director of Public Affairs, Risk Management Agency
Washington, D.C. – Federal crop insurance provides the risk management tools necessary for American farmers to stay in business after a difficult crop year. They can be the difference between a farmer going under because of a lean year or having a safety net that allows them to keep farming and rebuild.
These tools help farmers who rely on good farming practices for smart land use and preserve economic stability for generations. And the Risk Management Agency (RMA) has worked hard to extend risk management tools for organic producers.
Organic producers were first able to obtain crop insurance under the Agricultural Risk Protection Act of 2000.
However, due to the lack of data, organic farmers were initially charged an additional 5 percent surcharge and were only able to insure the “conventional price” for their crop – not the organic price.
Many organic producers felt the surcharge was not justified and that crop insurance prices needed to better reflect what they received in the marketplace.
As farmers continue to recognize the value of the crop insurance program RMA strives to improve the program so that it works for all producers. Significant efforts have been made to address the needs of organic producers. These changes are beginning to take effect.
Organic producers will benefit beginning in 2014, by no longer being charged the 5 percent surcharge on premiums. Organic and conventional premiums and yields will be based upon actual production history. Transitional yields, used when a producer lacks production history or following natural disasters will be separated between organic and conventional production potentially resulting in lower yields for some producers.
Also organic prices are available for organic farmers for corn, soybeans, cotton, processing tomatoes, avocadoes, fresh freestone peaches, fresh nectarines, and plums. Eight additional crops will be added for organics starting in 2014 (Oats, Peppermint, Apricots, Apples, Blueberries, Almonds, Pears, and Grapes for juice).
March 15th is the sales closing date for purchasing insurance for many spring planted crops. Sales closing dates vary by crop, state and county. Organic producers should consult a crop insurance agent to discuss their insurance options.
To further expand opportunities for organic producers, RMA introduced the Contract Price Option, which will be available for organic farmers who receive a contract price for their crop. This new option allows, under certain conditions, organic producers to base their crop insurance price upon the price they receive from their marketing contract.
Making reliable and effective risk management tools available for producers to make sound decisions that benefit the land is just one of the ways RMA supports the nation’s organic producers.