The early start and long duration of the 2020 wildfire season in California caused significant smoke taint to wine grapes. That’s a damage that can be protected with crop insurance, but the grape growers need a lab test to confirm it.
“Previously, 2018, we had 2,400 acres of smoke taint in California and we’re thinking we may have over 30,000 acres (this year),” said Martin Barbre, administrator of USDA’s Risk Management Agency (RMA), which oversees the federal crop insurance program. He said a backlog at testing labs added to the challenges this year. But overall, he estimated two-thirds of California’s wine grape acres are enrolled in the federal crop insurance program, and adds that some big operations may have self-insurance.
Barbre said the program is maturing and policies now offer 85% coverage.
“I feel like we will see that coverage grow, and coverage levels grow,” he said. “We’re hearing more of, ‘What can you do to improve our coverages and help us use crop insurance as our main risk management tool?’”
That’s been the goal of the past two farm bills, and Barbre says the 2018 law required RMA to put specialty crop advisors in each of its 10 offices across the country to work with farmers and commodity groups to consider and evaluate additional crops that could benefit from insurance. Currently around 120 specialty crops are included.
As Tara Smith, executive vice president of the DC-based firm Michael Torrey Associates, pointed out, major commodity crops like corn, soybeans and wheat also have access to Farm Service Agency programs in the farm bill, but for the most part specialty crops do not.
“There have been some ad hoc disaster programs that have covered wine grapes, but that assistance is really uncertain, it doesn’t tend to show up in a timely manner,” she said, “whereas crop insurance, of course, provides certainty and timeliness in payment.”
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Other specialty crops where farmers are increasingly buying insurance include apples, cherries, almonds and pistachios. Whole Farm Revenue Protection accounts for a significant amount of the specialty crops in insurance programs, according to RMA data that Smith and her colleagues collated. She said specialty crop farmers seem to be growing more comfortable with the concept of insurance, though it varies by person and growing conditions.
“Some of it has to do with risk. Some crops are being grown under irrigation, maybe they feel like their crop risk is relatively minor so maybe they don’t feel like it’s necessary to buy a policy,” said Smith. “Wine grapes are obviously a very high-value crop that require expensive inputs and so having that protection is important to those farmers.”
Crop insurance is designed to be more flexible than farm bill commodity programs, she said. It takes experience to ascertain where changes would be most beneficial to growers, though, and proposed new products must demonstrate to RMA that they are actuarily sound.
Ongoing conversations with farmers could help modify existing insurance products or lead to the creation of new ones. With the increasing frequency and severity of wildfire damage to grapes, Smith said there’s a greater understanding of what farmers need. For example, total crop devastation is relatively easy to assess. But the contract cancellation that can happen because of smoke taint might happen at several points in the winemaking process. She said RMA has provided more guidance to make the process go smoothly.
“A couple of years of experience goes a long way,” she said. “It’s unfortunate that we have a couple of years of experience under our belt with smoke taint.”