FAQ: USDA recently announced expansion of crop insurance to provide some additional options for farmers. Explain what that announcement is about.
Answer: USDA in late July announced some changes beginning with crop insurance for 2016. First change is that the Supplemental Coverage Option (SCO) and the Actual Production History (APH) Yield Exclusion are now available to cover fresh fruit and nuts in certain counties in the U.S. beginning with 2016 crop year.
"USDA remains committed to making new crop insurance options outlined in the 2014 Farm Bill available to as many types of producers as possible," says USDA chief Tom Vilsack. "Providing these options for producers of fresh fruit and nuts gives them the stronger safety net they need to continue farming, even after particularly bad years. USDA will continue to work toward implementing risk management provisions from the farm bill as quickly as possible so producers can plan for the future and protect their businesses."
USDA is making SCO available for more crops
SCO will now be available in select counties for almonds, apples, blueberries, grapes, peaches, potatoes, prunes, safflower, tomatoes and walnuts for 2016 crop year. Grapefruit, lemons, mandarins, tangerines, oranges, and tangelos will be eligible for coverage beginning with the 2017 crop year.
This is in addition to alfalfa seed, canola, cultivated wild rice, dry peas, forage production, grass seed, mint, oats, onions and rye that were recently made available for 2016 as well. Currently SCO covers corn, cotton, cottonseed, grain sorghum, rice, soybeans, spring barley, spring wheat and winter wheat in selected counties.
What exactly is SCO, and what does it cover?
SCO is an area-based policy endorsement that can be purchased to supplement an underlying crop insurance policy. It covers a portion of losses not covered by the same crop's underlying policy.
USDA's Risk Management Agency, which administers the federal crop insurance program, has posted information on the expanded program, including where SCO is available by crop and county. Visit rma.usda.gov/news/currentissues/sco/index.html to learn more.
What are the changes for APH Yield Exclusion?
Producers of apples, blueberries, grapes, peaches, potatoes, prunes, safflower, tomatoes and walnuts in select counties will have the option to elect APH Yield Exclusion for 2016 crop year. Producers of grapefruit, lemons, mandarins/tangerines, oranges, and tangelos will have the option to elect the APH Yield Exclusion for 2017 crop year. Alfalfa seed, cultivated wild rice, dry peas, forage production, oats, onions, rye and winter wheat are also eligible in certain counties beginning with the 2016 crop year. These are in addition to barley, canola, corn, cotton, grain sorghum, peanuts, popcorn, rice, soybeans, sunflowers and spring wheat, which were offered beginning in the 2015 crop year.
What does APH Yield Exclusion do for farmers?
The APH Yield Exclusion allows farmers, with qualifying crops in eligible counties, to exclude low yields in exceptionally bad years (such as a year in which a natural disaster or other extreme weather occurs) from their production history when calculating yields used to establish their crop insurance coverage.
Crop years are eligible when the average per planted acreage yield for the county was at least 50% below the simple average for the previous 10 consecutive crop years. It will allow eligible producers to receive a higher approved yield on their insurance policies through the federal crop insurance program.
New online tools help farmers choose best options
Producers also have access to new online tools designed to help them determine the options that work best for their operations. The Crop Insurance Decision Tool and the SCO/APH Yield Exclusion mapping tool, available online, provide farmers with information on APH Yield Exclusion and SCO eligible crops, crop years, and counties where they may elect the programs.
This user-friendly resource can help producers quickly explore and understand available coverage options. Users will get general estimates to help them make purchasing decisions. Producers should consult their crop insurance agent for detailed information, sales closing dates and an actual premium quote.
A list of crop insurance agents is available at all USDA Service Centers and online at the Risk Management Agency's agent locator. Growers can use RMA's cost estimator to get a premium amount estimate of their insurance needs online. Visit the RMA site at rma.usda.gov/news/currentissues/aphye/index.html to learn more about SCO and APH Yield Exclusion.