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Federal Crop Insurance Program for Organic Farming Practices

USDA's Risk Management Agency (RMA) has announced new changes to the Federal crop insurance program for organic farming practices. On Feb. 22, 2013, USDA's Office of Inspector General issued an audit of the USDA Risk Management Agency (RMA) Federal crop insurance program for organic farming practices. The audit found that Transitional yields* (T-Yield), offered to organic growers generally exceeded what they had produced using organic farming practices for the crop years of 2008-2010.

USDA's Risk Management Agency (RMA) has announced new changes to the Federal crop insurance program for organic farming practices.   

Federal Crop Insurance Program Changes

 

On Feb. 22, 2013, USDA's Office of Inspector General issued an audit of the USDA Risk Management Agency (RMA) Federal crop insurance program for organic farming practices. The audit found that Transitional yields* (T-Yield), offered to organic growers generally exceeded what they had produced using organic farming practices for the crop years of 2008-2010. In response to this audit, RMA plans to make several changes to their Federal crop insurance program for organic farming practices - including eliminating the 5% organic surcharge and changes to the T-Yields offered to organic producers beginning with crop year 2014. RMA is also working toward having organic prices in crop year 2014 or 2015 for almonds, apples, barley, blueberries, oats, pears, additional stonefruits, table grapes and wheat.

A transitional yield, in this instance, does not refer to the yields during the transition to certified organic production. For crop insurance purposes, a T-yield is an average yield for a county, determined by RMA in the collection of producer data, which may be used to substitute for low yields in a producer's yield history ('yield substitutions') or to ensure an overall minimum level of insurance coverage. The purpose of the T-Yield is to minimize the downward impact on insurance coverage that can occur after an unusually bad year, or series of years.

USDA Risk Management Agency has posted two documents concerning its response to the audit of organic crop insurance performance:  

2013 Organic Crop Insurance Fact Sheet  

Organic Crop Insurance Audit and Next Steps Questions and Answers  

These documents can be found on the RMA "Current Issues/Organics" page. There is also a link from the RMA main page.

Organic Producers should contact their approved insurance provider/Agent should they have any questions about the changes to Transitional yields and guarantees.

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