New crop insurance pricing options available for organic producers
By Wes Nelson
Farm Service Agency
WILLMAR — According to data from the U.S. Department of Agriculture, organic agriculture is now more than a $30 billion industry and is one of the fastest growing segments of American agriculture.
Over the past 10 years, the number of USDA-certified organic farms and businesses in the United States has expanded to approximately 17,750. This represents a 240 percent increase since USDA began collecting data on organic agriculture and the organic industry.
Similarly, the retail value of the organic industry grew almost 9.5 percent in 2011 to $31.4 billion. Organic foods also continue to gain market share in the food industry, climbing to 2.4 percent of U.S. retail food sales in 2011.
In the interest of assuring and supporting the continued success and growth of organic agriculture, the USDA’s Risk Management Agency has announced a number of changes and new initiatives to its federal crop insurance program for 2014, including new premium price elections for organic crops.
In addition, the Risk Management Agency will remove the current 5 percent organic rate surcharge on all future crop insurance policies beginning in 2014.
The new crop insurance pricing options will be available to organic producers who grow crops under guaranteed contracts during the 2014 crop year. This will allow organic producers who receive a contract price for their crop to get a crop insurance guarantee that is more reflective of the actual value of their crop.
Organic producers will have the ability, where available and at their choice, to use their personal contract price as their price election, or choose existing crop insurance price elections.
The contract price option will be available for between 60 and 70 crops in the 2014 crop year and will be available to the majority of insured organic crops.
Also being changed in 2014 are the crop insurance organic transitional yields, or t-yields, so they are more reflective of actual organic farming production history.
All crops are being evaluated for establishing organic prices for the 2014 crop year, with the hope of adding organic price elections for six to 10 additional crops. Two crops that have already been selected for organic price elections in 2014 are oats and mint, with apricots, apples, blueberries, millet and others still under consideration.
Current pricing options only allow farmers to insure organic crops at the conventional price elections, with the exception of eight crops — corn, soybeans, cotton, processing tomatoes, avocados and several fresh stone fruit crops.
Under the Organic Foods Production Act of 1990, USDA is responsible for establishing national standards for organically produced agricultural products. The National Organic Program has been critical for the development of clear standards and enforcing a level playing-field for organic businesses, which has led to expanded trade opportunities and creates new markets for U.S. organic businesses.
These standards also assure consumers that products with the USDA organic seal meet consistent and uniform standards. It also allows USDA-certified organic producers and ranchers to receive premium prices for their value-added products.
Minn. receives USDA funding
Nine new agricultural research projects in Minnesota can now begin with funding provided by the U.S. Department of Agriculture. The focus of the research projects is to enhance the competitiveness of specialty crops.
The research projects will share more than $676,000 in funding provided by USDA’s Agricultural Marketing Service under its Specialty Crop Block Grant Program.
These nine Minnesota research projects were scored and ranked by a panel of experts in specialty crop production and marketing, and were chosen from among 27 applications.
The University of Minnesota received funding for three research projects to improve producers’ knowledge of good agricultural practices and food safety practices; ensure public food safety of locally grown leafy greens by enhancing farmer training; and reduce the incidence and severity of scab, verticillium wilt and other soil-borne potato diseases.
Another project hopes to increase the purchasing of specialty crops by the childcare and school sectors through outreach activities, and curriculum dissemination on incorporating farm to school education in classrooms.
Food price inflation erodes value of SNAP benefits
Benefits provided by USDA’s Supplemental Nutrition Assistance Program, formerly called the Food Stamp Program, were increased in 2009 by a provision of the American Recovery and Reinvestment Act.
Previous USDA research found that low-income households’ food spending increased and their food security improved following the increase in SNAP benefits. However, from 2009 to 2011, food price inflation eroded about half of the value of the SNAP-benefit increase.
A new report released by USDA’s Economic Research Service examined whether, and to what extent, did food spending decline and food security worsen as the inflation-adjusted value of SNAP benefits decline.
Some of the major findings of the study were as follows:
* From 2009 to 2011, food security worsened for SNAP-recipient households, but not for low-income non-SNAP households, as the inflation-adjusted value of SNAP benefits declined due to inflation.
* Adjusted for inflation in food prices, the maximum SNAP benefit declined by about 7 percent, a reduction of $47 per month for a family of four.
* Results of two studies suggest that increasing the maximum SNAP benefit by 10 percent, or $69 per month for a family of four persons, would reduce the number of SNAP-recipient households with low food security by 22 percent, while reducing the maximum benefit by 10 percent would increase that number by about 29 percent.
To view the entire findings of this study, visit USDA’s Economic Research Service website at www.ers.usda.gov.
Wes Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.