The Risk Management Safety Net:
IX. Market Potential: RMA On-Going Initiatives and Priorities for Improvement of Market Penetration
A. Principle Crops
1. Continued education and outreach in states with lower participation of principle crop insurance programs.
2. Continue to explore new and different products targeting specific policy features and risks such as trend yield, organic coverage and specific prices.
3. Continue to work on organic practices to increase the opportunities to insure using organic prices as data become available and update organic rates and T-Yields with available data to the extent possible.
B. Other Field Crops, Hay, Livestock, Pasture/Range/Forage, Nursery, Fruits/Nuts, and Vegetable Crops
1. Pasture, Range and Forage – There are many acres of pasture, range and forage in the U.S. but the Pasture/Range/Forage insurance product still has low market penetration to date. RMA is currently working on a contracted program evaluation and will consider further expansion if the program is approved to be a permanent program by the Board. Outreach activities and educational materials explaining the program in a simple manner, along with continued program oversight, will be important to this program. There is an opportunity with this product to increase market penetration and to improve the risk management safety net for both crop and livestock producers.
2. Nursery Crop Insurance Program – The nursery insurance program is one of the largest Federal crop insurance products after the main program commodities, but is sold mostly at the CAT level of insurance. RMA is evaluating the results from a recently completed contracted evaluation to assist in making improvements to the program.
3. Insurance Coverage for Hay - The U.S. hay crop encompasses many acres across the U.S. but has low Federal crop insurance market penetration. RMA has already begun dialogue with and will continue to work with the hay and forage industry to explore additional insurance possibilities to provide both crop and livestock producers with new or improved products that will provide effective hay insurance coverage.
4. Insurance Coverage for Livestock - Although livestock insurance expenses are limited by statute, RMA will work to identify the risks livestock producers face and explore different types of insurance products for livestock coverage.
5. Coverage opportunities for field crops such as those used for energy - RMA will explore possibilities for insurance specific to crops used for energy or for other specific targeted markets as they are identified.
6. Insurance Coverage for Fruits/Nuts and Vegetables - RMA will continue to explore improved coverage opportunities for fruits, nuts and vegetables, including working with industry to recognize changing needs for the availability of insurance, reviewing county availability of insurance programs, and exploring new product potential.
C. Uninsured Crops
1. Conduct feasibility studies and develop new insurance products utilizing input from the agricultural community and Congress, new information, and the table in Attachment 2 to identify specific commodities to research in consideration of new products. Priority will be given to the larger crops on the uninsured list or specific needs to cover new risks for fruits/nuts, vegetables, livestock, energy, organic, and specialty crops as well as identifying new risk management needs.
2. Explore the potential for Whole Farm Insurance product(s) in the form or one or more different products to address a wide range of potential needs, sizes of operations and varying markets, in particular for producers of crops without available insurance products. The existing Adjusted Gross Revenue and Adjusted Gross Revenue-Lite programs will also be combined into one product and simplified to the extent practical.
For more information, contact John Shea.