WASHINGTON, Feb. 18, 2016 – USDA announced Thursday it will give farmers transitioning from conventional to certified organic production the option of purchasing expanded crop insurance coverage.
“Expanding the safety net for farmers wanting to enter the organic market ensures they have the tools and resources they need to meet this growing demand while protecting their operation,” Agriculture Secretary Tom Vilsack said today.
The organic sector, which boasts more than $39 billion in retail sales annually, has grown considerably in recent years as a result of high consumer demand. Some farmers have taken notice, particularly because certified organic products often fetch higher prices compared to conventional.
Converting a conventional farming operation to an organic one takes a minimum of three years, however, and during that transition farmers are only able to insure their crops at lower, conventional crop price points.
With today’s announcement, that’s changed. Transitioning farmers can now insure their crops at their contract price under the Contract Price Addendum instead of the published USDA Risk Management Agency (RMA) price election. A list of eligible commodities under the CPA is available here.
In an email, Laura Batcha, CEO and executive director of the Organic Trade Association, told Agri-Pulse she was pleased with USDA’s move.
“It is not easy to transition to organic, and transitioning farmers should have a strong safety net,” she said. “This announcement is a small but important tool in what needs to be a full tool kit for transitioning to organic. We look forward to working with USDA to build out that tool kit.”
USDA gave an example of how the CPA could benefit transitioning farmers. For instance, it said, a Nebraska farmer can use a contract price for millet up to a maximum of $7.34 per bushel for transitional or $8.44 for certified organic production, instead of using the existing RMA price elections of $3.67 for transitional or $4.22 for certified organic production.
RMA also expanded organic premium price elections to 57 crops, including barley, rice and wheat. In 2017, the agency will add grapefruit, lemons and oranges to the list.
To buy a new crop insurance policy or to change an existing policy’s coverage level, producers will need to contact RMA before the appropriate sales closing date.
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