By Frank Giles
When disasters impact specialty crop growers, challenges with federal crop insurance for fruits and vegetables are apparent. Whether it’s hurricanes or freezes, the same discussions arise about how the policies don’t fit the realities of specialty crops.
Those challenges were recently addressed during a listening session hosted by Congresswoman Kat Cammack (FL-3). She also serves on the House Agriculture Committee. Regina Thomas, senior vice president with Farm Credit of Central Florida, shared remarks on the crop insurance problems and potential fixes on behalf of specialty crop growers.
THE CHALLENGES
One of the biggest challenges is that each fruit and vegetable crop is unique, and those needs have to be reflected in individual policies. It is a far different formula than the homogenous nature of row crops. Thomas said this calls for more engagement and communication.
“We see several key challenges,” she said. “First, specialty crop policies are frequently designed and updated without consistent, structured input from growers and front-line agents. This means that when problems appear in the field or in claims, there is often no timely mechanism to adjust policies, and issues can persist for years.
“Second, some policies are so complex, administratively burdensome or perceived as risky that only a small number of approved insurance providers are willing to offer them, and even then, commissions to agents are often reduced on these products. This discourages agents from actively offering specialty crop coverage and limits access for growers who need these tools the most.
“Third, there is often limited practical knowledge of specialty crop markets and production realities within the program’s rulemaking and implementation. Specialty crop pricing can be volatile, with growers frequently not knowing the final price at the time of harvest, and yet ‘reasonableness’ tests and policy rules may not fully account for that reality. Finally, communication protocols can discourage agents from directly seeking timely clarification on complex specialty crop policies, slowing down accurate guidance to producers.”
An example of the barriers to coverage for specialty crops can be found in strawberries. In Florida, one approved insurance provider supplies 90% of the real production history policy coverage for strawberries. Other insurance providers are not interested in supplying the coverage because of its complexity and lack of incentive.
Specialty crops represent significant risk to the insurance providers as they are grown in highly concentrated areas and due to the significant return per acre carry a higher liability. An example of this is that an acre of corn may gross $1,500 (300 bushels x $5), whereas a flat of strawberries produces $17,600 of field value (22,000 pounds/acre x $.80/pound).
Potential Fixes
Thomas offered Cammack potential solutions to address the gaps in crop insurance for specialty crop growers. She suggested the establishment of a Specialty Crop Advisory Committee to advise the Federal Crop Insurance Corporation on the development, administration and improvement of risk management products and policies for specialty crops.
Improved training for U.S. Department of Agriculture (USDA) staff to help them build knowledge of specialty crop policies also would be helpful. In addition, Thomas suggested modernization of communication channels between USDA and approved insurance agents would help clarify policy questions that often arise.
Improvements also would include amendments to the Federal Crop Insurance Act to include coverage that explicitly includes damage or destruction of essential production infrastructure directly related to the insured crop when such infrastructure is customarily used as part of the production system and its loss results in or is substantially likely to result in reduced yield or quality. An example of this would be plastic in strawberries.
Getting Real With Yields
Another area that has been underrepresented in specialty crop coverage is establishing more accurate yield projections, which policies are based upon. This is especially important in Whole Farm Revenue Protection coverage.
Field-trial data being collected by university researchers from farmers would create more accurate yield projections. This data should be supplied to USDA’s Risk Management Agency to establish more accurate benchmarks. As new, more highly productive varieties are released, these yield expectations need to be updated often to reflect new data.
Complex Issue
When you begin to peel back the layers of each crop’s specific need, it is understandable why it has been very difficult to craft insurance programs that work well.
Thomas thanked Cammack for hearing the concerns of the industry. “Your leadership and voice can help ensure that specialty crop producers have risk management tools that are fair, accessible and aligned with how their crops are actually grown and sold,” said Thomas.
The good news is the current farm bill making its way through Congress has dedicated significant language toward addressing crop insurance issues laid out by fruit and vegetable growers.
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