Organic insurance options grow; fraud too?

06/25/2014 09:47:00 AM
Tom Karst

Tom KarstEnjoying listening to Amazon Prime Music tonight (“I would trade all my tomorrows for that single yesterday..”) as I sift through e-mails that rolled in while I was rolled up last week.

Ferd Hoefner, policy director of the National Sustainable Agriculture Coalition, forwarded a link to the group’s blog post about organic price elections for crop insurance.

 The blog post also contains a link  to a USDA Risk Management Agency report to Congress about the agency’s progress toward completion of organic price elections for all insurable organic crops.

From the NSAC blog post, a primer on the issue:

What are Organic Price Elections?

Many organic producers are currently disadvantaged compared to conventional farmers because organic price elections have not been established for all insurable organic crops. This means that, should an organic producer suffer a loss, he or she would receive a payout rate at the conventional price, which is generally considerably lower than the organic price. USDA has issued organic price elections for several crops, but not all.

USDA’s Progress on Organic Price Elections Currently, there are sixteen crops with organic price elections available. Compared to 2013, USDA has doubled the number of organic price elections available for the 2014 crop year, but this still leaves many organic producers unable to insure other crops at prices that reflect the organic premium.

Current Organic Price Elections include:

• almonds (California only)

• fresh apples (Idaho, Oregon, and Washington only)

• avocados (California only)

• blueberries (all types in California; Early to Late highbush type in Oregon and Washington)

• Concord variety grapes (Oregon and Washington only)

• corn

• cotton (non-ELS)

• mint (peppermint)

• oats

• pears (Oregon and Washington only)

• fresh stonefruit (freestone peaches, nectarines, fresh apricots and plums in California; all fresh stonefruit in Idaho, Oregon, and Washington)

• processing tomatoes (California only)

• soybeans.

 

The blog post from NSAC and the 11-page RMA report will bring readers up to date on the work towards more robust organic price insurance options. But is there a danger in these crop insurance products, the “moral hazard” of producers farming the government instead of their furrows? Read this NPR report of several years ago about “Farm Fraud and the South Texas Watermelon disaster”  for a look in at how insurance cheats brought down the watermelon pilot insurance program.


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