Crop Insurance for Organic Producers 12th Annual Iowa Organic Conference Iowa City, Iowa Nov. 19, 2012 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 Photos: USDA-ARS 1

Organics in Crop Insurance Prior to the Agricultural Risk Protection Act of 2000 (ARPA), organic farming practices were not considered as “good farming practices” for insurance purposes So production losses under organic practices were not covered by insurance ARPA changed that, went into effect in 2004

Organic Crop Insurance The federal crop insurance program now provides coverage for: Certified organic production Transitional production to reach organic certification Buffer zone acreage Coverage available if the government has premium information

Organic Crop Insurance Crop losses due to weather, insects, disease, or weeds are covered Contamination of the crop (by application of a product or drift from another field) is not Need to show written certification of organic production or an organic plan, along with the location of organic (and non-organic) fields

Organic Crop Insurance Many types of insurance available: Yield Protection (YP) Revenue Protection (RP) Group Risk Plan (GRP) Group Risk Income Plan (GRIP) Adjusted Gross Revenue (AGR) Adjusted Gross Revenue Lite (AGR-Lite) Livestock Risk Protection (LRP) Livestock Gross Margin (LGM) Pasture, Rangeland, and Forage (PRF)

Organic Crop Insurance Participation Source: RMA

Organic Crop Pricing The federal crop insurance is updating how it sets organic crop prices In some cases, the insurable price is the same for organic and convention crops For some crops, a production contract can be used to set the price

Organic Crop Pricing For corn and soybeans, new rules have been developed Price is now based on the 3-year average price ratio between USDA-AMS’s organic “low” price category and the CBOT average monthly futures price Corn: 1.41 * Conventional price Soybeans: 1.59 * Conventional price

Insurance Performance Organic: 3.55 million acres, $166 million paid out Conventional: 352 million acres, $8 billion paid out Source: RMA

AGR and AGR-Lite Are whole-farm revenue policies Covers most farm-raised crops, animals, and animal products Insurance based on 5-year average farm revenue as reported on tax forms Schedule F

Thank you for your time. Any questions. My web site: http://www. econ Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/~chart/ Iowa Farm Outlook: http://www.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/