US: New crop insurance pricing options available for organic producers

According to data from the U.S. Department of Agriculture, organic agriculture is now more than a $30 billion industry and is one of the fastest growing segments of American agriculture.

Over the past 10 years, the number of USDA-certified organic farms and businesses in the United States has expanded to approximately 17,750. This represents a 240 percent increase since USDA began collecting data on organic agriculture and the organic industry.

Similarly, the retail value of the organic industry grew almost 9.5 percent in 2011 to $31.4 billion. Organic foods also continue to gain market share in the food industry, climbing to 2.4 percent of U.S. retail food sales in 2011.

In the interest of assuring and supporting the continued success and growth of organic agriculture, the USDA’s Risk Management Agency has announced a number of changes and new initiatives to its federal crop insurance program for 2014, including new premium price elections for organic crops.

In addition, the Risk Management Agency will remove the current 5 percent organic rate surcharge on all future crop insurance policies beginning in 2014.

The new crop insurance pricing options will be available to organic producers who grow crops under guaranteed contracts during the 2014 crop year. This will allow organic producers who receive a contract price for their crop to get a crop insurance guarantee that is more reflective of the actual value of their crop.

Organic producers will have the ability, where available and at their choice, to use their personal contract price as their price election, or choose existing crop insurance price elections.

The contract price option will be available for between 60 and 70 crops in the 2014 crop year and will be available to the majority of insured organic crops.

Also being changed in 2014 are the crop insurance organic transitional yields, or t-yields, so they are more reflective of actual organic farming production history.

All crops are being evaluated for establishing organic prices for the 2014 crop year, with the hope of adding organic price elections for six to 10 additional crops. Two crops that have already been selected for organic price elections in 2014 are oats and mint, with apricots, apples, blueberries, millet and others still under consideration.

Current pricing options only allow farmers to insure organic crops at the conventional price elections, with the exception of eight crops — corn, soybeans, cotton, processing tomatoes, avocados and several fresh stone fruit crops.

Under the Organic Foods Production Act of 1990, USDA is responsible for establishing national standards for organically produced agricultural products. The National Organic Program has been critical for the development of clear standards and enforcing a level playing-field for organic businesses, which has led to expanded trade opportunities and creates new markets for U.S. organic businesses.

These standards also assure consumers that products with the USDA organic seal meet consistent and uniform standards. It also allows USDA-certified organic producers and ranchers to receive premium prices for their value-added products.


Source: USDA Farm Service Agency