A new report by USDA’s Economic Research Service demonstrates how federal risk management programs have changed and attracted more specialty crop producers while also investigating the decision-making process for participation.
The report looks at participation in both the Federal Crop Insurance Program (FCIP) and the Noninsured Crop Disaster Program (NAP), which is only available in counties where FCIP is not available for a particular crop. As of 2021, RMA had 76 individual crop insurance policies for specialty crops.
Here are a few key findings from “Specialty Crop Participation in Federal Risk Management Programs”:
The value of specialty crops insured by FCIP increased from about $12 billion in 2011 to about $21 billion in 2020 (not adjusted for inflation). The states with the most policies are top producers of fruits and vegetables — California, Florida, and Washington — and specialty field crops such as dry beans or dry peas — Montana and North Dakota.
In general, states that have fewer FCIP policies have a higher number of NAP applications. In 2020, the states or U.S. territories with the highest number of conventional specialty crop NAP applications were North Carolina, Puerto Rico, and New York.
The number of specialty crop producers who applied for NAP coverage trended up — from about 8,000 in 2015 to over 9,000 in 2020. Changes to NAP, such as the addition of coverage that exceed the minimal level (called buy-up coverage) in 2015, likely made NAP a more attractive risk management tool.
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In 2017, FCIP or NAP insured a large portion of acreage for some crops: about 93% for dry peas, 92% for dry beans, 87% for plums and cherries, and 83% for tomatoes. However, FCIP or NAP covered a smaller share of acreage for other crops: about 47% for pecans, 39% for squash, 13% for kiwifruit, 11% for strawberries, and less than 1% for hazelnuts and lettuce.
In general, states that have fewer FCIP policies have a higher number of NAP applications. In 2020, the states or U.S. territories with the highest number of conventional specialty crop NAP applications were North Carolina, Puerto Rico, and New York. The full report is available here.
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