Crop Insurance Today August 2012 - (Page 35)

TODAYcrop insurance Crop Insurance & Specialty Crops By Keith Collins, NCIS This article provides a brief examination of how well crop insurance is providing coverage for specialty crops. The role of specialty crops in the farm economy is identified, trends in crop insurance coverage for specialty crops are presented using a series of tables and graphs and challenges facing the crop insurance industry in product development and sales for specialty crops are discussed. While a number of small-acreage specialty crops remain uninsurable, and continuing efforts are needed to improve availability and coverage levels, crop insurance is available for a wide variety of specialty crops and participation is generally high. Growing Focus on Specialty Crops Specialty crops have garnered enormous attention in agriculture policy development in recent years, with the current Farm Bill (the Food, Conservation, and Energy Act of 2008, or 2008 Farm Bill) containing the first-ever title for specialty crops (Title X. Horticulture and Organic Agriculture). The interest stems from many interrelated factors, starting with diet and health concerns and including such varied elements as the increase in obesity, rapid growth in organic production, interest in local food production and the rise of farmers’ markets. The policy focus has been on addressing producer needs, such as technical trade assistance, providing block grants to improve competitiveness, expanding research, and on increasing demand through various food programs. The effectiveness of crop insurance for specialty crops has also been under review. For example, the 2002 Farm Bill (Section 10006 of the Farm Security and Rural Investment Act of 2002) directed USDA to conduct a study of crop insurance and specialty crops, which was completed in May 2004 (Report on Specialty Crop Insurance). USDA has also been required to report to Congress on the progress in covering new and specialty crops (Section 508(a)(6)(B) of the Federal Crop Insurance Act). In response to this requirement the Federal Crop Insurance Corporation published in November 2010, Report to Congress: Specialty Crop Report. The Senate-passed version of the 2012 Farm Bill (the Agriculture Reform, Food, and Jobs Act of 2012) continues the interest in specialty crop coverage. For exam- ple, Section 11015 of the bill would make new product proposals offered under Section 508(h) of the Federal Crop Insurance Act eligible for additional advance funding if the products are for “under-served agricultural commodities, including...specialty crops.” The bill also calls for development of a Whole Farm Diversified Risk Management Insurance Plan for selected specified products, including specialty crops (Section 11016), makes both research and financial benchmarking for specialty crop products a priority (Sections 11019 and 11022, respectively) and includes some other initiatives identified in the last section of this article. What is a Specialty Crop? When USDA released its 2004 specialty crop report, it defined specialty crops using a definition in the Agricultural Economic Table 1. Specialty Crops in U.S. Farm Cash Receipts for Crops Cash Receipts, 2000 (bil $) % of Total Cash Receipts, 2010 (bil $) % of Total Fruits & Nuts Vegetables & Melons Greenhouse & Nursery Grains & Feed Crops Oil Crops Cotton, Tobacco, Other Total Crops 12.3 15.8 13.7 27.1 13.5 10.1 92.5 13.3 17.1 14.8 29.3 14.6 10.9 100.0 21.5 19.9 15.6 66.4 35.1 16.5 175.0 12.3 11.4 8.9 37.9 20.1 9.4 100.0 Source: Economic Research Service, USDA, farm income database. CROP INSURANCE TODAY 35

Table of Contents for the Digital Edition of Crop Insurance Today August 2012

“What is, and What Should Never Be....”
Developing Risk Management Plans
Crop Insurance Rate of Return: Issues & Concerns
2011 Research Review
RMA/AIP Data Mining Steering Committee
NCIS Adjuster Training in Full Swing
Industry Support of FFA
Crop Insurance & Specialty Crops

Crop Insurance Today August 2012