Date: Jun 01, 2014
Magazine:
June 2014 - Jay Leno to Headline WG Annual Meeting

Many people are not aware that crop insurance is now available for strawberries.  The program was created a couple of years ago, but few growers know about the policy.  It’s quite different from prior versions of crop insurance for strawberries as it guarantees the revenue of the grower based on historical average revenue.  Perhaps the most significant change is this policy provides coverage for losses due to market price.  However, there were a number of problems with the product as formulated by the federal government.

Over the past year, Western Growers met with a number of California strawberry growers to discuss the current Strawberry Actual Revenue History Crop Insurance Policy.  While reviewing the policy, the growers identified several issues that needed to be resolved to enhance the product.  Western Growers noted their suggestions and reached out to the USDA/Risk Management Agency (RMA) to request changes.  While the USDA/RMA may not have agreed to all the changes, it was open to making revisions.  Some of the major changes include:

1.  Increasing revenue coverage from 75 percent to 85 percent

Prior to the upcoming 2015 crop year, the policy only covered 75 percent of the net revenue for a grower.  Growers stated they would be interested in the policy if it covered a higher percentage of net revenue.  Western Growers recommended the policy have a higher option net revenue choice.  The USDA/RMA increased coverage to 85 percent.

2.  Eliminate confusing regulations

Crop insurance has many rules and regulations that a grower must follow.  One rule in particular was a reporting requirement the grower must follow.  The regulation required the grower to review production at the end of a picking cycle and calculate yields with a county average yield comparison chart, and report if the yield percentage fell below a specific threshold.  Western Growers believed this to be a cumbersome and complex regulation and requested this process to be simplified or eliminated.  The USDA/RMA eliminated the grower reporting requirement.

3.  Increase claims reporting time period

Most crop insurance policies have a standard rule of reporting a crop loss within 72 hours.  The strawberry policy had a 24 hour reporting period not consistent with other policies.  We requested a standard 72 hour notice of loss period in comparison to the previous 24 hour reporting allowing uniformity with other crop policy procedures.

Western Growers was extremely pleased when the above requests were granted.  The strawberry policy is a newer product made available in California.  This insurance policy is a revenue coverage protection plan protecting your crop income.  Therefore, it covers you in the event of a production loss as well as market conditions loss that would cause revenue to plummet.  The difference is the revenue history is calculated on an average rather than production history alone. 

For example, a grower elects to cover 85 percent of the revenue for each acre:

$35,724 Actual Revenue History per acre multiplied by 85 percent = $30,365 Revenue Guarantee per acre

Actual Revenue per acre is $12,600

Loss Payment- $30,365-12,600=$17,765 per acre

Coverage levels start at 50 percent and cap at 85 percent.  In order to qualify for a loss the growers’ average revenue must fall below the percent of coverage elected.

In order to qualify further, the crop has to have suffered an insurable cause of loss.  Some covered causes of loss include frost, hail, wind, excessive rain, excessive heat, insects and plant disease caused from adverse weather, wildlife, birds, earthquake and fire from natural causes, failure of irrigation water supply, and low market price (ARH).

If you are looking for more information, now is the time to inquire.  Crop insurance must be purchased by the sales closing date in order for coverage to become effective.  The deadline to purchase crop insurance for Fresno, Merced, and Ventura Counties (summer planted) is July 1, 2014.  Santa Barbara, Monterey, Santa Cruz, and Ventura Counties (winter planted) have a September 30, 2014 deadline.

To explore crop insurance options, schedule an appointment.  For more information, please call Western Growers Crop Insurance Division at 1(800) 333-4WGA.

 

The deadline to purchase crop insurance for Fresno, Merced, and Ventura Counties (summer planted) is July 1, 2014.  Santa Barbara, Monterey, Santa Cruz, and Ventura Counties (winter planted) have a September 30, 2014, deadline.

 

WG Staff Contact

Western Growers
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949-863-1000

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