Insurance Expansion for Farmers Who Are Switching to Certified Organic Agriculture from the USDA

Insurance Expansion for Farmers Who Are Switching to Certified Organic Agriculture from the USDA

Just recently the Agriculture Secretary, Tom Vilsack said that a brand new step that would support farmers who are switching to certified organic production, that would expand the crop insurance option which will allow farmers to purchase insurance that would better reflect their product’s real value. The insurance development is a piece of the U.S. Department of Agriculture’s continuous pledge that will give farmers the resources and tools. The resources and tools will help meet the growing demand for organic products that are certified.

Consumers want more organic products and this continues to increase. The industry has seen a remarkable growth; this represents more than $39 billion worth of U.S. sales. This is the kind of growth that farmers are wanting. This creates great chances for the farms and for business across the country. This will also expand a safety net for the farmers who are wanting to produce in the organic market, this ensures that they have the proper resources and tools that are needed to produce in the growing demanding and protect their crops.

Certified organic products are often higher in returned profits for farmers. Switching to certified organic from conventional can often take up to three years. In the past, the farmers of transitional crops were able to only insure the crops at the same rate as the conventional farmer. After the recent announcement from Vilsack, the insurance will now ensure that farmers can insure transitional crops at the contract price, within approved limits.

The producers who are transitioning to a certified organic crop will now be able to use the Contract Price Addendum to shield the crops at a greater price than the traditional crops. The Contract Price Addendum will allow farmers who are transitioning to the organic production to insure that certain crops are at the contract price rather that a published U.S. Department of Agriculture Risk Management Agency price selection.

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The Risk Management Agency will to expand the organic premium price selections to 57 crops, this has risen from four since 2011. This will offer organic producers an option that will protect the 2016 crops to be closer to the market value. The organic price selections have been added to barley, rice, and wheat. Grapefruit, oranges, and lemons will be added in 2017.

For instance, if under the Contract Price Addendum, a farmer in Nebraska will use the contract price for millet for up to $7.34 a bushel for transitional and $8.44 for certified organic. The existing RMA price selections of $3.67 for transitional and $4.22 for certified organic. The Contract Price Addendum is available here.

The USDA has supported programs to support the organic farmer as they grow since 2009. In 2015, the USDA stated that the U.S. certified and exempted organic farms sold a whopping $5.5 billion of organic products in 2014. This has risen up 72% since 2008. The market for organic products has been valued at more than $39 billion. In 2014 worldwide there were 28,000 certified organic crops, within 120 different countries. For more information on the support of the USDA can be found here.

Farmer’s crop insurance is sold by private crop insurance agents. If you need more information you can contract a local insurance agent for more about the program. Also, a list of crop insurance agents is ready at all the USDA Service Centers.

Famers can find closing dates for the crops in their current state by going to the RMA’s regional office state directory. For current policyholders, you also have until the closing sale dates to make any changes to your existing contracts.

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A list of commodities eligible for the Contract Price addendum is available online.

Fresh apples in baskets on display at a farmer's market

More information on risk management tools available for organic farmers can be found on the RMA organic crops website. Visit www.usda.gov/organic to learn more about USDA’s resources for organic agriculture.

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