Crop insurance is an easy and effective tool to transfer risk to someone else. It is a way of protecting against unexpected loss due to a multitude of unavoidable natural events. Congress considers crop insurance to be a major risk management tool and has provided money to significantly subsidize the premiums farmers pay. There is a wide array of insurance products producers can choose from to meet their risk management needs. 

(After National Crop Insurance Services’ Crop Insurance and Risk Management Primer, Risk Overview, page 51.)

 Federal risk management programs such as crop insurance are now available for most agricultural commodities and have become effective and affordable risk management tools. Available programs vary widely in structure and coverage terms, but all of the programs are heavily subsidized, with some premium costs and all administrative costs covered the Federal Government. Like all risk management options, crop insurance and related programs should be considered in conjunction with other risk management strategies that may be employed in a given enterprise.

 

In 2002, RMA awarded a contract to Watts and Associates to assess the feasibility of developing a pilot crop insurance program for Christmas tree growers. The project is still underway and may ultimately result in the development of a new risk management tool for Christmas tree growers. Project updates are likely to be found on the RMA website. 

 

The USDA’s Farm Service Agency’s (FSA) Noninsured Crop Disaster Assistance Program (NAP) provides financial assistance to producers of non-insurable crops when low yields, loss of inventory, or prevented planting occurs due to natural disasters.  Christmas tree producers may be eligible for NAP.  More information about NAP is available on the FSA website. 

Two articles are provided on the topic of Federal Risk Management Programs:

1. From the National Crop Insurance Services’ Crop Insurance and Risk Management Primer, we provide an article by Dr. Laurence M. Crane entitled Crop Insurance Overview.
2. From FSA, we provide the three-page Noninsured Crop Disaster Assistance Program Fact Sheet.

These articles were selected for their relevance, ease of understanding, and completeness; however, they do not provide an exhaustive discussion of the structure and availability of crop insurance and related risk management programs. Readers desiring additional information about Federal risk management programs are encouraged to explore the reference links provided on the following pages.

 

 

Additional References

 

Library Sources

• National Ag Risk Education Library: http://www.agrisk.umn.edu/;

• Recognizing Risks: http://www.wvu.edu/~agexten/farmman2/riskmang/risk.htm.

Articles

• 2007 RMA Crop Policy (General Policies and Provisions): http://www.rma.usda.gov/policies/2007policy.html;

• FSA Noninsured Crop Disaster Assistance Program: http://disaster.fsa.usda.gov/nap.htm.

 

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