Crop Insurance Today Second Quarter 2021 - 28

Wildfires in the Western part of the United
States began in earnest earlier than usual and
continued to rage throughout the latter part
of the growing season, charring a record number
of acres, especially in many of the prime
grape-growing areas. Over $207 million in fire
related indemnities were paid, making it the
highest single loss event for grapes in at least
the last seven years. Smoke taint was a major
issue, impacting the quality of grapes near the
fires and requiring certified laboratory testing of
more samples than the industry had previously
witnessed. Compounding loss adjustment was
the lack of set standards for determining the
number of volatile compounds from the smoke
that could result in a measurable loss of quality
in the grapes. However, NCIS Committee members
and staff worked diligently in response to
grower needs as AIPs provided timely inspections
and indemnity payments all while maintaining
program integrity within prescribed
policy limits.
The industry, and particularly the NCIS
MPCI Policy Procedure and Loss Adjustment
Committee, dealt with numerous loss adjustment
issues as the year went on all while working
around Covid-19 restrictions. The issues
included work on finding greater efficiency
in handling self-certification replant claims,
addressing questions stemming from quality
adjustment changes in tobacco, making several
recommendations for changes to improve
quality adjustment factors in various crops, and
focusing on the details and requirements for
implementing the new Quality Loss Option.
Stemming from a record number of prevented
planting acres in 2019, RMA formed a Prevented
Planting Work group to consider several potential
coverage improvements. After receiving
input from stakeholders, ultimately RMA decided
to expand the " 1 in 4 " requirement for land
to be eligible for prevented planting coverage
nationwide, extend the use of an intended acreage
report for establishing eligible acres in a new
county, made exceptions for receiving a prevented
planting payment on a different crop if the
farmer could prove their planting intentions,
and not requiring uninsured crop acreage following
a failed first crop from being subtracted
from prevented planting eligible acreage.
Continued Improvement
and Expansion of Crop
Insurance Coverage
Although 2020 kept bringing Covid-19
challenges, the continued commitment towards
program improvements and expansion
never wavered. RMA continued its willingness
to work with growers and the industry by addressing
needed program improvements, holding
virtual listening sessions, and sharing draft
proposals for comment and feedback. Work on
development of new and improved policy coverage
for hurricane wind, nursery, strawberries,
citrus coverage, prevented planting, and numerous
other crops also continued. In total, RMA
updated, revised, or issued new policies for
approximately 36 different crop programs impacting
any one of the crop years 2020 through
2022, depending on the particular crop. Additionally,
there were two different changes to the
Area Risk Protection Insurance and Common
Crop Insurance Policy Basic Provisions applicable
to the June 30 and November 30 contract
change dates making various program revisions
requiring NCIS and the AIPs to diligently train
and educate the delivery system workforce and
farmers so they could be fully aware of the enhanced
coverage options.
After the FCIC Board of Directors (Board)
acted late in 2019 to approve a new hemp individual
crop insurance policy for 2020, RMA
moved rapidly to implement the new policy for
the 2020 crop year in a number of states. While
first year results were mixed given concerns with
initial rules for hemp production, subsequent
policy modifications were made along with additional
expansion to more states for the 2021
crop year. Given the expectations that were created
upon authorization in the 2018 Farm Bill,
only time will tell where and what becomes of
this crop in the future.
One of the major new programs RMA introduced
for the 2020 season was the Hurricane
Insurance Protection-Wind Index Endorsement
(HIP-WI). The new program was the result of
a 2018 Farm Bill requirement to research and
develop a policy to insure crops (including tomatoes,
peppers, and citrus) against losses due
to tropical storm or hurricane. RMA offered the
first year HIP-WI program in 22 states on approximately
70 different crops generating liability
in excess of $648 million (Figure 16). North
Carolina led all states with the highest liability
28 SECONDQUARTER2021
Crop Insurance Today Second Quarter 2021

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