USDA Expands Farm Safety Net, Offers Greater Flexibility for Organic and other Farmers

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September 17, 2015 - One of the challenges facing U.S. organic farmers is the lack of coverage, or limited risk protection, available through the federal crop insurance program. The standard practices of organic farmers have not fit well into an insurance framework created to serve conventional agriculture.

But thanks to provisions of the 2014 Farm Bill, organic growers could soon see much-improved options for crop insurance; such as coverage for diversified farm operations and reimbursement rates that cover organic’s higher costs.

The farm bill required the U.S. Department of Agriculture (USDA) to establish organic price elections for all organic crops by the 2015 crop insurance year, which began in July 2014. Risk protection options have also improved in recent years through the efforts of USDA’s Risk Management Agency (RMA).

A recent announcement by Agriculture Deputy Secretary Krysta Harden revealed several changes that will benefit organic farmers.

The 2014 Farm Bill authorized RMA to create a new, crop-neutral revenue insurance product for diversified farming operations. Starting in 2016, this product, Whole-Farm Revenue Protection insurance, will be available in every county in the nation. Unlike traditional yield or revenue insurance, this product is not intended for a single specific crop, but for all the crops and livestock grown or raised on a given farm.

For diversified specialty crop growers, mixed grain and livestock producers, and other diversified and organic producers, whole farm crop insurance provides an insurance option that recognizes and accommodates the inherent risk management benefits of on-farm diversification.

"Whole-Farm Revenue Protection insurance allows producers who have previously had limited access to a risk management safety net, to insure all of the commodities on their farm at once instead of one commodity at a time," Harden said. "That gives them the option of embracing more crop diversity on their farm and helps support the production of a wider variety of foods."

USDA also announced an expanded list of price elections for organic crops. Starting in 2011, RMA established organic price elections for 26 crops out more that 100 that had individual policies. Organic price elections allow organic farmers to insure their crop at the organic market price rather than conventional market price, which is typically much lower.

The main components of federal crop insurance for organic farmers is to establish crop insurance price elections that reflect organic price premiums; provide the option for organic producers to insure their crop at a specified contract price; and to remove the premium surcharge on organic crop insurance.

For the 2016 crop year, 14 new Organic Price Elections will be added to the 30 already available - greatly expanding crop insurance options for organic farmers. The 2016 elections will include wheat, barley, rye, dry peas, safflower, cultivated wild rice, cabbage, cranberries, forage, onions, potatoes, clingstone peaches for processing, grass seed, and sugarcane. Additionally, for 2017 there will be elections available in Arizona and California for lemons, oranges, tangelos, mandarins, and grapefruit.

Also for 2016, RMA announced an increase in the availability of the Contract Price Addendum, which is being made available to 73 crops, up from 62. This product allows producers to insure a crop at the price for which they contract the production of the crop.

By Jane Shey, OFRF Policy Associate

Image courtesy USDA RMA