Proposed Changes To Crop Insurance Program

The Federal Crop Insurance Commission (FCIC) has proposed several changes to the crop insurance program. These changes, if implemented, will begin for the 2011 crop insurance year and continue for the succeeding years. The 2010 crop year (which begins November 20, 2009) will be under the current program requirements. The changes to the existing program were posted on the Federal Register on Tuesday September 8, 2009 and are open to comment until the close of business on November 9, 2009. Please review all changes and make comments as you see fit. I will highlight some of the major changes within this article.

The most dramatic change is that fresh apples and processing apple production may be designated as separate optional units. However, you must follow recommended cultural practices generally used for fresh apple acreage. Processing apple production will be defined as “apples from insurable acreage failing to meet the fresh apple production requirements.”

You may need to certify to your insurance provider that you sold at least 50 percent (of your fresh apple production from acreage insured as fresh) as fresh apples in one or more of the three most recent crop years. As you are harvesting this season, keep the most accurate records possible to comply with this requirement. As with all of agriculture, record keeping is becoming a requirement for many programs within the fruit industry. Keeping accurate and detailed records will only benefit your operation for years to come.

All insurable damage to either fresh or processing apples will be counted on a unit basis. If you fail to notify your insurance provider of any insurable damage to the crop prior to harvest, or if apple production is not graded prior to sale or storage, then such production will be considered production to count and will be counted against your guaranteed production and will be included in your Actual Production History (APH). You must leave representative samples of the insurable damage if required by your insurance provider. Also, language has been added clarifying that any damage after the crop is harvested and placed in storage, or is sold, is not insurable.

If you have used Optional Coverage for Quality Adjustment in the past, this option will only apply to apples insured as fresh production. It will not be available for processing production. Also, under this option, the FCIC proposes to make any fresh production sold as U.S. Fancy or better will count towards your production.
There are also many small wording changes included within the Federal Register that you should review. These are the major changes the FCIC is proposing. As previously stated, the comment period ends November 9, 2009 so take some time to look this over carefully. The following bullet points cover the most dramatic changes.

• Allow optional units by type (varietal group definition would be removed) as specified in the Special Provisions of Insurance. For example, an optional unit for fresh apple production, and an optional unit for processing apple production.

• Allow the apple grower (insured) to select different coverage levels for the fresh apple acreage (unit) and the processing apple acreage (unit).

• Insureds will be required to provide verifiable records to prove that 50% of their fresh apple acreage was sold as fresh apples in one or more of the three recent crop years. Note: apple growers must follow recommended cultural practices generally in use for fresh apple acreage in the county as determined by agricultural experts.

• A new section has been added to the policy to state that any apple production not graded prior to sale or storage will be considered as production to count.

I know many producers and insurance providers have been requesting changes to the apple program and these are a result of these requests. You may have additional changes you see necessary and some of these changes you may disagree with but, the FCIC is trying to accommodate the requests. They also need to try to eliminate any potential for fraud within the program. Make your feelings known by commenting on these proposed changes, however you feel.

To read the entire posting and for how and where to send comments, visit: http://www.regulations.gov. Once there, type apple into the box labeled “Keyword” and it will be listed farther down on the screen.

Source: Penn State University Fruit Research and Extension Center

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