What You Need To Know About Crop Insurance

For young growers, securing crop insurance can seem like a daunting task with all of the information available. Fortunately, there are options at your disposal through USDA’s Risk Management Agency (RMA), which manages the Federal Crop Insurance Corporation, providing crop insurance products to growers.

Flooded vegetable field in South Florida
Photo courtesy of FDACS

Through the Federal Crop Insurance Program, approved insurance providers (AIPs) sell and service federal crop insurance policies in every state through a public-private partnership with RMA. RMA then backs the AIPs who share the risks associated with catastrophic losses due to major weather events.

RMA Associate Administrator Tim Gannon offers young growers four pointers to keep in mind about federal crop insurance and what mistakes they should avoid.

1. People New To Farming And Ranching Can Get Special Considerations

With its beginning farmers and ranchers provisions, USDA continues to serve the next generation of growers by improving access to land, capital, and risk management tools, Gannon says. Those who qualify for the beginning farmer and rancher designation, receive an extra 10% in premium subsidy, meaning the premium for crop insurance paid out of pocket by the grower is less.
Furthermore, qualifying beginning growers do not have to pay an administrative fee for their policy, may use the production history of the previous grower from that farm, and are eligible for a higher substitute yield adjustment used for the years they did not have a history of growing the crop to help determine the expected yield.

2. Consider Going Organic

Organic agriculture is experiencing remarkable growth in the U.S., seeing $39 billion in retail sales last year. The RMA oversaw $649.7 million in federal insurance coverage provided nationwide in the 2015 crop year for certified organic crops and those transitioning to certified organic.

In addition to the same opportunities for crop insurance that are available to non-organic growers, RMA has established organic prices for 57 crops that more accurately reflect the higher prices organic growers receive for their crop.

Also, for more than 60 crops, organic growers and growers transitioning to organic practices may now use their contract prices to cover an amount of liability that is more reflective of the actual value of their crop through the use of RMA’s Contract Price Addendum. Whole-Farm Revenue Protection coverage also is available to organic crop growers, Gannon adds.

3. Understand Your Coverage And The Covered Causes Of Loss

Causes of loss are crop specific and can change depending on the crop. It is best to consult the specific crop provisions for more information regarding covered causes of loss, he says.
Noteworthy causes of loss include:
• Adverse weather conditions;
• Failure of the irrigation water supply due to a specified cause of loss that also occurs during the insurance period;
• Fire;
• Insects, but not damage due to insufficient or improper application of pest control measures;
• Plant disease, but not damage due to insufficient or improper application of disease control measures; and
• Wildlife.

4. Know Your Dates

Adhere to the deadlines in the Federal Crop Insurance Program.
Sales closing date: This is the date an application must be filed and is the last date you may change your crop insurance coverage for a crop year.
Acreage reporting date: This is the date you are required to submit your acreage report.
Earliest planting date: This is the initial planting date, which is the earliest date you may plant an insured agricultural commodity and qualify for a replanting payment, if such payments are covered by the policy.
Final planting date: This is the date a crop must initially be planted to be insured for the full production guarantee or amount of insurance per acre.

5 Crop Insurance Mistakes To Avoid

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