NSAC's Blog


Progress Report on Organic Price Elections for Crop Insurance

June 19, 2014


The U.S. Department of Agriculture (USDA) has released a new report updating Congress on USDA’s Risk Management Agency (RMA) progress towards completion of organic price elections for all insurable organic crops.  USDA has improved crop insurance offerings for organic farmers, but report makes it clear there is still a lot more work to do.

With NSAC’s support, the 2008 and 2014 Farm Bills contained language that directed USDA to complete the series of organic price elections. The 2014 Farm Bill directed USDA to complete the elections by the 2015 crop insurance year. USDA makes it clear in this new report that it is not going to complete the organic price elections under that timeline (the 2015 insurance year starts in July 2014).

However, the 2014 Farm bill delivered the message that rapid acceleration is both needed and expected and this new report outlines RMA’s actions to finish the price elections.  These price elections are incredibly important for organic producers, who with limited exception are stuck insuring crops at prices far below the organic premium.

What are Organic Price Elections?

Many organic producers are currently disadvantaged compared to conventional farmers because organic price elections have not been established for all insurable organic crops.  This means that, should an organic producer suffer a loss, he or she would receive a payout rate at the conventional price, which is generally considerably lower than the organic price.  USDA has issued organic price elections for several crops, but not all.

USDA’s Progress on Organic Price Elections

Currently, there are sixteen crops with organic price elections available.  Compared to 2013, USDA has doubled the number of organic price elections available for the 2014 crop year, but this still leaves many organic producers unable to insure other crops at prices that reflect the organic premium.

Current Organic Price Elections include:

  • almonds (California only)
  • fresh apples (Idaho, Oregon, and Washington only)
  • avocados (California only)
  • blueberries (all types in California; Early to Late highbush type in Oregon and Washington)
  • Concord variety grapes (Oregon and Washington only)
  • corn
  • cotton (non-ELS)
  • mint (peppermint)
  • oats
  • pears (Oregon and Washington only)
  • fresh stonefruit (freestone peaches, nectarines, fresh apricots and plums in California; all fresh stonefruit in Idaho, Oregon, and Washington)
  • processing tomatoes (California only)
  • soybeans.

Further Information on the Report

This new report outlines USDA’s current efforts to collect the data it says it needs to be able to complete organic price elections for all insurable crops.  USDA indicates they are now pursuing efforts to obtain data showing post harvest costs to organic producers.  If USDA knows what kinds of costs organic farmers have post harvest, they can better determine the farm-gate value of the crop.  The farm-gate value of a crop is the main basis that RMA uses to establish the organic election price.

The report also outlines USDA’s current efforts to work with the National Agricultural Statistic Service (NASS) to utilize organic survey data from the 2007 and 2012 Censuses of Agriculture and the more limited 2014 Organic Production Survey data.  The Organic Production Survey data will not be available until 2015.

The continued collection of this data presents the best opportunity for RMA to obtain the farm gate value data they need to finish the organic price election series.  NSAC has been working to encourage NASS to conduct the most comprehensive Organic Production Survey possible in 2014, so that this data is comparable to past surveys and more useful for organic price elections.

Alternatives to Organic Price Elections

Through the efforts of NSAC and its members, there are also several other options either in place or in the works for organic farmers to be able to ensure their crops at the organic price even if an organic price election does not yet exist for the specific crop.

  • An organic Contract Price Addendum, which allows any producer to insure their crop at the contract price. This program is not exclusive to organics, but does currently allow farmers to insure 62 different crops at the contract price if the required type of insurance is available in the county for the qualifying crop.
  • The new whole farm revenue insurance product, which is expected to be available for the 2015 crop insurance year in forty-three states plus in certain specified counties in California.

In addition, RMA has two other options available that may be useful to certain organic farmers.

  • Actual Revenue History policies offered for cherries, navel oranges and strawberries. This program uses personal historical revenue documentation to determine coverage.
  • RMA requires that certain crops be grown under a contract.  This allows organic producers growing one of these crops to insure it at the organic price included in the contract.  The policies that require a contract in order to be insured are buckwheat, camelina, sesame, green peas, machine-harvested cucumbers, mustard, processing sweat corn, and pumpkins.

Conclusion

USDA is making progress on organic price elections for crop insurance.  In 2011, only 4 crops had price elections (corn, soybeans, cotton, and processing tomatoes) and today there are more than twenty.

As this new report makes clear, though, there are challenges to RMA obtaining the data they believe is needed to complete the organic price elections series.  We are encouraged by USDA’s commitment in the report to seek out new and creative ways to obtain the needed data, but are still concerned by the slow pace of progress.

NSAC will continue to advocate for a strong commitment to organic data collection, including but not limited to future NASS Organic Production Surveys.  However, RMA must also consider alternatives data sources in order to complete all the organic price elections, in a timely manner, as Congress has directed.


Categories: Commodity, Crop Insurance & Credit Programs, Organic Farming


Comments are closed.

Archives

Stay Connected