RMA to farmers in 2020: 'We listen to you'

WASHINGTON — Crop insurance administered by USDA’s Risk Management Agency (RMA) enabled producers to better weather this year’s many natural disasters. Federal crop insurance provided more than $113 billion in total coverage and to date has paid out over $5.8 billion indemnities. Additionally, RMA worked diligently to maximize flexibilities to help producers better cope with the impacts of the COVID-19 pandemic.

“We tell farmers all the time, ‘We listen to you.’ We have made it our mission to make federal crop insurance work for our nation’s producers, whether it’s helping incubate new policies or leveraging additional flexibilities in times of the pandemic,” said RMA Administrator Martin Barbre. “In an unpredictable year like this one, we are reminded of the importance of crop insurance and how it enables producers like me to better manage risk.”

Key highlights from 2020 include:

Flexibilities amid Pandemic: To help producers amid the pandemic, RMA authorized many crop insurance flexibilities, including extended deadlines, waived certain requirements and deferral of interest, and worked with Approved Insurance Providers (AIPs) to ensure continuity of crop insurance services such as processing policies, claims, and written agreements. Learn more.

Disaster Recovery: Natural disasters, including wildfires and drought in the West, hurricanes along the Gulf Coast, and the derecho in the Midwest, took a toll on U.S. agriculture during the year. In a year with 30 named storms, RMA was able to introduce three new policies that will help producers recover from hurricanes. The Hurricane Insurance Protection – Wind Index (HIP-WI) covers 70 different crops and is available in counties near the Gulf of Mexico and the Atlantic as well as Hawaii To date, HIP-WI has resulted in over $150 million in indemnities. RMA worked with the Florida citrus industry and other stakeholders to develop the Florida Citrus Actual Production History (APH) policy. Florida Citrus APH has many advantages over the existing Florida Citrus Fruit Dollar plan, offering individualized coverage based on historical yield, more comprehensive coverage including during the bloom phase until fruit forms on the tree, an option for enterprise units, and a simpler loss adjustment process and faster settlement of claims. Lastly, Nursery Value Select (NVS), a new crop insurance pilot program was introduced that provides better coverage for nursery producers, many of whom are in the active hurricane area of south Florida. NVS improves on the existing Nursery plan by simplifying the application, renewal, and loss adjustment processes, and allows producers to select the dollar amount of coverage, among other improvements. To date, around 200 NVS policies now cover nearly $300 million in liabilities, however, more reporting is expected to increase that figure by year’s end.

Improvements to Insurance Coverage: RMA has continued to enhance its existing programs and coverage options. For prevented planting coverage, RMA expanded the “1 in 4” requirement nationwide, requiring producers to plant, insure, and harvest acreage in at least one of the four most recent crop years. This improvement ensures that prevented planting covers producers when they really need it, but also prevents repeated claims on perpetually wet acreage. The agency updated the Livestock Risk Protection insurance program for feeder cattle, fed cattle, and swine, increasing premium subsidies and livestock head limits. Finally, RMA also updated the Whole-Farm Revenue Protection (WFRP) program, which will decrease paperwork and recordkeeping burdens for direct marketers, including decreasing the requirements for reporting yields and revenues for each commodity.

Hemp: RMA expanded the pilot Multi-Peril Crop Insurance (MPCI) plan for hemp as well as made improvements. This builds on the rollout of MPCI as well as coverage options through WFRP last year. RMA has coordinated closely with USDA’s Farm Service Agency (FSA) to align deadlines to apply for coverage and to file acreage reports between crop insurance programs and FSA’s Noninsured Crop Disaster Assistance Program, another risk management tool. More information can be found at farmers.gov/hemp.

New Coverage: In addition to the new coverage options for helping producers impacted by hurricanes, RMA rolled out the Enhanced Coverage Option (ECO) and the Quality Loss Option (QLO). ECO is a new crop insurance option that provides additional area-based coverage for a portion of producers’ underlying yield or revenue-based crop insurance policy deductible. The QLO allows producers to replace post-quality production amounts in their Actual Production History databases with pre-quality production amounts, thereby increasing their actual yields for individual crop years.

RMA is a part of the Farm Production and Conservation (FPAC) mission area at USDA. Other 2020 highlights can be found here.

Crop insurance is sold and delivered solely through private crop insurance agents. A list of crop insurance agents is available online using the RMA Agent Locator. Learn more about crop insurance and the modern farm safety net at rma.usda.gov.

–USDA RMA

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