The US Department of Agriculture & # 39 ;s Risk Management Agency sees growth in programs to ensure greater volume and variety of organic and specialty crops, reflecting increased consumer purchases of such products.
While the majority of USDA crop insurance programs go toward commodity crops such as corn, wheat, and soybeans, the specialty and the organic realm thrive.
“Over time, we have tried to expand outside the larger crops because you have a growing organic sector, you have a growing specialty crop sector. You have people who are more interested in eating fruits and vegetables. We have really tried to make the most of it, says Richard Flournoy, acting administrator of the USDA RMA, based in Kansas City, Missouri. billion for the first time, according to the Organic Trade Association.
The USDA RMA's business has grown with this increase. From 1
"Because these types of coverages come online and give these farmers risk protection – a cherry grower in Michigan, an avocado farmer in Florida – the farmer has greater security to step into that field and produce that crop," said Bob Haney, CEO of AgriSompo and CEO of AgriSompo North America, in Des Moines, Iowa.
Mr. Haney said he has seen more inquiries from customers who take special crops for insurance, with one example being pistachios. Sompo has also seen growth in coverage for dairy products, as livestock is also under the auspices of the USDA insurance program.
Lockton Cos. LLC has seen growth in the organic sector since it expanded its crop insurance division in 2018, says Ginny Olson, vice president and senior account manager, Harvest Insurance, who joined the broker to help build the business. "My growth has been in the organic space," she said.
Although the crops that make up the bulk of the USDA program benefit from decades of production data on which they can base policy and tariff calculations, specialty crops do not. “In Iowa, we have been growing corn for 50 years. We do not have 50 years of carrots, celery and others, "said Haney.
The USDA RMA's whole farm income protection plan can help small crop producers by providing a risk management network under insurance for all goods on a farm as opposed to a single commodity farm.
Producers purchased more than 2,000 such insurances to protect $ 2.26 billion in debt by 2020, and the RMA is revising the plan to make it more flexible and accessible to producers beginning in the 2022 harvest year.
Viable insurance for the organic industry is crucial for its continued success both due to the growing state of the industry compared to giant products and the extra costs of organic fertilizers and the like, Olson said.
Sompo recently expanded further into the agricultural sector. Sompo International Holdings Ltd., a Bermuda-based real estate / accident insurance and reinsurance specialty provider, announced in December last year that the acquisition of Diversified Crop Insurance Services, a subsidiary of CGB Enterprises Inc.
Diversified was merged with ARMtech, Sompo International's existing US federally sponsored multi-risk crop insurance companies, to operate under the AgriSompo North America brand
with total gross premiums of over $ 2 billion.