risk management agency spokane regional office spring 2010
TRANSCRIPT
General update on the Federal crop insurance program in the State of Washington:
Insurable Crops in Washington Federal Crop Insurance Participation General Program Update
2010 Changes
Cherries – New ARH Program
2011 – New Common Crop Policy
◦ Partnership Agreements
Premium Premium SubsidySubsidy
Federal Crop Insurance Private Sector Delivery SystemFederal Crop Insurance Private Sector Delivery System
Agricultural ProducersAgricultural Producers(1.1 Million Policies)(1.1 Million Policies)
264 M Acres264 M Acres
$79.95B in Coverage$79.95B in Coverage
RMA/FCICRMA/FCIC
16 Private Insurance 16 Private Insurance CompaniesCompanies
Insurance Agents Insurance Agents (25,000+)(25,000+)
Loss Adjusters Loss Adjusters (5,000+)(5,000+)
FCIC FCIC Approved Approved Insurance Insurance
PolicyPolicy
SRASRA8 writing in WA
Apples, Barley, Blueberry, Cabbage, Canola, ARH Cherry Pilot, Corn, Cranberries, Dry Beans, Dry Peas, Flax, Forage Production, Forage (Alfalfa) Seed Pilot, Grapes, Table Grapes, Green Peas, Mint, Mustard, Nursery, Oats, Onions, Pears, Potatoes, Processing Beans, Processing Sweet Corn, Safflower, Stonefruit, Sugar Beets, and Wheat
Adjusted Gross Revenue Pilot (AGR) Adjusted Gross Revenue-Lite (AGR-Lite) Pasture, Rangeland & Forage (PRF) Pilot Livestock Risk Protection – Cattle, Swine, Lamb Apiculture (API) Pilot Livestock Gross Margin Dairy Cattle
Note: Program availability varies by county and subject to change
2010 Crop Insured By-State/County2010 Crop Insured By-State/County
Post on RMA Spokane RO Internet PagePost on RMA Spokane RO Internet Pagehttp://www.rma.usda.gov/aboutrma/fields/wa_rso/http://www.rma.usda.gov/aboutrma/fields/wa_rso/
Washington Insurance Participation – All Crops
0
500
1,000
1,500
2,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 *2009
Coverage in Millions of Dollars
CAT Buy-Up2.6M ac insured in 2009
Updated 2/2010* data not final7
Washington Loss Payments – All Crops
0
50
100
150
200
250
300
350
2000 2001 2002 2003 2004 2005 2006 2007 2008 *2009
Loss Payments in Millions of Dollars
CAT Buy-Up
updated 2/2010* data not final8
2009 Insurance Participation Washington State - Fruit
CropsPotential Acres
Insured
Acres %Acres Insured
Amount of Coverage
Apples 173,000 123,508 71% $413.5M
Cherries 37,200 23,135 63% $150M
Pears 25,200 14,490 57% $28M
Grapes 62,700 46,312 75% $57.5M
Fresh Peaches 2,850 1,502 53% $2M
Fresh Apricots 1,100 757 69% $1.7M
Fresh Nectarines 1,550 1,244 80% $1.6M
Updated 2/2010
+$1.1M
+$5M
+$97M
+$105M
+3K ac
2009 Insurance Participation Washington State – other select crops
Crops Potential Acres
Insured Acres
%Acres Insured
Amount of Coverage
Onions 20,800 14,682 70% $16.9M
Dry Peas 142,000 129,811 91% $25.9M
Barley 125,000 43,807 35% $6.5M
Dry Beans 65,500 16,679 25% $5.5M
Potatoes 155,000 105,320 68% $139M
Sweet Corn 81,600 62,681 77% $29.7M
Wheat 2,420,000 1,931,974 80% $736M
updated 2/2010
+48K ac +$10M
-60K ac -$12.5M
-12.5K ac -$.5M
+$317M +180K ac
FSA Uninsured
NAP Program
also available
FSA Uninsured
NAP Program
also available
* New Program for 2010
Additional coverage and endorsement available for
some commodities
Additional coverage and endorsement available for
some commodities
Our job to tailor programs and coverage for producers we serve
Multiple Peril Crop Insurance (MPCI) Protects producer’s loss of revenue resulting from low yields Based on Producer’s individual Actual Production History
(APH). Actual Production History (APH): Actual amount of
production from a farm unit used to determine the insurance guarantee (4 build to 10 average)
Insured can purchase from 50 up to 75%
(85% on some crops) coverage based
on Average APH on Insurance Unit If unit yield is below production guarantee
insured gets paid a set amount (price election)
for every bushel/lb, etc. below production
guarantee. Most crops include quality coverage
MPCI – Causes of Loss
Adverse weather conditions Fire Insects
if adequate control measures applied Plant disease
if adequate control measures applied Wildlife Earthquake Volcanic eruption Failure of the irrigation water supply due to
an unavoidable cause of loss occurring within the insurance period
Revenue Plans Available in PNW Revenue Assurance (RA)
Barley Idaho, Oregon and Washington – Spring Only Canola Idaho AND NEW for 2010 Oregon and
Washington Spring Only
Wheat Idaho only – Winter and Spring Income Protection (IP)
Barley Idaho, Oregon and Washington Wheat Idaho Oregon and Washington
Crop Revenue Coverage (CRC) Corn Idaho, Oregon and Washington Wheat Idaho, Oregon and Washington
These products provide coverage to protect against loss of revenue caused by low prices or low yield’s or a
combination of both.14
Other Revenue Based Plans Revenue Plans
Adjusted Gross Revenue * Adjusted Gross Revenue-Lite (AGR-Lite) * Livestock Risk Protection (LRP) [Cattle, Sheep, Swine] Livestock Gross Margin (LGM) [Dairy]
Program availability varies by crop / state / county & is subject to change.
*whole farm insurance – all ag commodities produced are eligible for insurance based on insured adjusted gross revenue on a whole farm basis. Nearly 100 different commodities insured in Washington State many of which don’ t have separate MPCI policies available.
Catastrophic (CAT) Crop Insurance What does this policy cover / provide?
Catastrophic loss 50% deductible 55% of established price Basic Unit
What doesn’t this policy cover / provide? Optional units Price fluctuation on crops like wheat/barley with revenue
protection Other policy optionsCost: $300 per crop / county * *Waivers are available to Limited-Resource Farmers
Recent Program Changes in Washington Barley and Canola Revenue Assurance (RA)
Expansion into all Barley and Canola counties Potato Policy
Whatcom County: Final Planting Date changed from May 31 to June 15
Grape Policy Changes for 2010 Insure by varietal type, (expanded from 5 groups to
23 varietal specific types) May insure the value of grapes at the contract price
(less harvest cost) Expanded into seven Western Washington counties:
Clark, Island, Kitsap, Mason, Pierce, San Juan, Skagit
17
Recent Program Changes in Washington Mustard Policy
Converted to regulatory program (Asotin, Columbia, Garfield, Lincoln, Spokane, Walla Walla, and Whitman).
Cabbage Policy Insurance will not attach to any acreage planted to
cabbage or any other Brassicaceae crop (e.g., cauliflower, broccoli, etc.) in either of the two previous crop years unless a written agreement request is initiated prior to sales closing date.
Specialty Use Barley for 2010 5 types covered Must be under contract Allows insured to insure based on contracted price Implement of 2010, except fall barley counties will be
implemented in 201118
Recent Program Changes in Washington Dry Peas / Lentils
New policy 2009 Expanded into Douglas County, WA for 2010
Fall and Spring planted Austrians, Fall and Spring planted Smooth Green or Yellow Fall and Spring planted Lentils
Winter Coverage for 2010 Asotin, Douglas, Lincoln, Whitman
Buckwheat WA Expansion 2010 Grant, Franklin and Walla Walla counties
Apple Policy Proposed rule is out for comment. RMA plans to have the final rule
published for 2011 crop year.
19
Recent Program Changes in Washington Livestock Gross Margin (LGM)
Expanded into all WA counties The Livestock Gross Margin for Dairy Cattle Insurance
Policy provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows.
Livestock Risk Protection - Lamb Expansion to Washington State Changing the limit for an individual Specific Coverage
Endorsement (SCE) from 7,000 to 2,000 head Addition of a 20 week endorsement to better fit the
production and marketing cycles of range and inter-mountain operations
A change from the ‘formula live’ AMS price series to the ‘formula carcass’ AMS price series converted to a live basis by use of the dressing percent to establish coverage
20
Washington: Adams, Benton, Chelan, Douglas, Franklin, Grant, Klickitat, Okanogan, Walla Walla and Yakima
Huge increase in business in 2009 with 23,172 acres insured - $151 M in coverage and as of 2/8 $23.4 M in losses with many still being worked.
Problems with Warehouses not accepting fruit.
RMA met with hundreds of industry representatives and AIP’s and worked through all the issues as best we could providing maximum flexibility within the constraints of the policy
2010 Business looks promising even after the problems we had in 2009. Policies sold increased from 955 to 1,062.
RMA modified the quality standards in Washington to reflect Washington’s Marketing Order and revised the Underwriting Guides and Loss Standards
Probably the single most important and fundamental change in the program in over 20 years – big rollout planned this year
One policy will provide yield protection, revenue protection, revenue protection w/the harvest price exclusion
CRC (Crop Revenue Coverage), RA (Revenue Assurance), IP (Income Protection), and IIP (Indexed Income Protection) are replaced by the following two new plans of insurance: Revenue Protection Revenue Protection w/the
Harvest Price Exclusion Combo - 24
Partnership Agreements The Risk Management Agency (RMA) is committed to
Alaska, Idaho, Oregon, and Washington agricultural producers by: Providing Risk Management information and training, Establishing research projects to create additional tools for
farmers/ranchers to better manage their risks, and Providing community outreach to traditionally underserved
producers. The Agriculture Risk Protection Act of 2000 (ARPA)
earmarked funds for RMA to form “partnerships” with public and private organizations. Alaska, Idaho, Oregon, and Washington agricultural producers have benefited from over $13.6 million since FY 2001, for outreach, education, and research.
2010 Announcement Published in Federal Register
Washington Partnerships (active in 2010)
OUTREACH Partnerships“Building Blocks for Risk Mitigation for Socially Disadvantaged Farmers and Ranchers”
Rural Community Development Resources
Provide outreach and technical assistance to underserved/unserved farmers/ranchers to meet RMA’s strategic goal of ensuring their customers and others are well informed.
“Mobile Workshops for Women, Underserved, Latino and Socially Disadvantaged Farmers and Ranchers”
Washington State Department of Agriculture
Help Latino and women producers understand the variety of risk management tools available to help make risk management choices to better manage their farms in Washington State.
Education SMALL SESSION Partnerships“Risk Management Training for Washington Livestock Producers.”
Custom Ag Solutions
Provide risk management training opportunities for 250 Washington livestock producers expected to participate in the 2009 Washington Cattlemen’s Association Annual Meeting.
Spokane Regional OfficeDave Paul, Director
11707 E. Sprague Ave, Suite 201Spokane Valley, WA 99206
509-228-6320
www.rma.usda.gov1-800-205-9953 Toll Free