Crop Insurance Today Second Quarter 2022 - 25

Drought in the West
couple of decades, there is continued demand for
new crop policies and coverage into all areas of
production agriculture. The industry and RMA
worked collaboratively to hold virtual listening
sessions and meetings, share draſt proposals for
comment and feedback, work with growers and
program representatives to find effective and efficient
risk management solutions for both new
crop development and maintenance of existing
crop programs. In total, RMA updated, revised,
or issued new policies for approximately 20 individual
crop programs, some of which included
Production Revenue History for strawberries,
hybrid vegetable seed, forage seeding, malt barley,
grape, Florida citrus, sweet and tart cherry,
pistachio, camellia, and hemp among many others.
In addition, improvements were made to area
or index-based programs like Stacked Income
Protection, Rainfall Index, and the Hurricane
Insurance Protection-Wind Index plan, all of
which impacted numerous insured commodities
heading into the 2022 crop year. And 2021
saw more changes to the Common Crop Insurance
Policy and Area Risk Protection Insurance
Basic Provisions applicable to the November 30
contract change date addressing improved coverage
for organic crops, providing greater flexibility
around cover crop uses without reducing
prevented planting payments, and clarifying requirements
around the " 1 in 4 " rule for prevented
planting. Again, this required NCIS and the
AIPs to move quickly in training and educating
the delivery system workforce so farmers could
be fully aware of their enhanced coverage options
and program requirements.
The Federal Crop Insurance Corporation
Board of Directors (Board) remained busy addressing
numerous efforts of RMA and private
developers at improving, modifying, and expanding
the crop insurance program. The Board
acted upon over 50 different submissions ranging
from confidential submissions for new concept
proposals or revised policies or products, to fully
developed and complete private sector and RMA
product submissions that either modified, clarified,
or expanded existing or previously approved
products, and ultimately establishing user fees for
proven products in the marketplace. These efforts
included improvements and modifications of
livestock policies with increased head limits, new
types of cattle and swine, modified ownership
requirements, revised dairy class pricing values
along with making numerous policy provision
improvements, and revised sales periods geared
towards greater participation and producer use
of the widely available livestock coverage. These,
among other recent Board efforts at improving
livestock policies stemming from the 2018
Farm Bill, have resulted in a dramatic increase
in livestock business. Since the 2018 insurance
year, livestock premium earning policies have increased
almost five-fold and liability has jumped
from just over $500 million to over $14.2 billion
for 2021. And it appears this business is continuing
to grow, garnering more attention from all
stakeholders, and keeping the program on everyone's
radar moving forward. The Board also
addressed improvements to nursery, pulse crops,
hybrid seed crops, tree crops including pecans,
macadamia, citrus and apple, and specialty crops
like fresh market beans, Florida citrus, sweet and
tart cherries, and caneberries. For newer crop
programs there is a continuous improvement
effort as more underwriting and loss adjustment
experience is gained from insuring these crops
for the first time. While most remember the huge
expectations created for hemp stemming from
the 2018 Farm Bill, and the FCIC Board and
RMA moving expeditiously to approve an individual
insurance policy, first year results were
mixed given concerns with initial rules for hemp
production.
Subsequent policy modifications
were made along with additional expansion to
more states for the 2021 crop year. Unfortunately,
2021 crop year results were not responsive to the
changes with only 55 policies earning premium
on a little over 10,000 acres. However, about half
of those policies experienced an indemnity with
the year's loss ratio settling around 2.67. More
changes and clarifications were made in 2021 for
the 2022 crop year and time will tell if this program
reaches closer to its expectations.
The Whole Farm Revenue Protection (WFRP)
policy continued to see more modifications
aimed this time at improving effectiveness for organic
growers, aquaculture producers, and small,
highly diversified farmers. This included increasing
expansion limits for organic farmers by up to
$500,000 and up to $8.5 million for aquaculture
producers, adding flexibility around reporting
acreage as certified organic while seeking an
organic certification, and providing flexibility
to report partial yield history when records are
lacking by use of a " zero " yield for missing years.
While policy sales have declined the WFRP polCROPINSURANCE
TODAY®
25
Crop Insurance Today Second Quarter 2022

Table of Contents for the Digital Edition of Crop Insurance Today Second Quarter 2022
