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1 1 (May 11, 2022)

handle is hein.crs/govegjp0001 and id is 1 raw text is: Con grc info r mi n ~ssionoI Research Servio S Updated May 11, 2022 Federal Crop Insurance: Fruits, Vegetables and Specialty Crops For decades, Congress has sought to expand federal crop insurance coverage for fruits, vegetables, and other specialty crops-starting with changes enacted in the 1990s through farm bill legislation in the Agriculture Improvement Act of 2018 (P.L. 115-334), in addition to administrative efforts at the U.S. Department of Agriculture (USDA). These efforts expanded the scope of the Federal Crop Insurance Program (FCIP) and broadened policy coverage so that policies are now available for a wide range of commodities. Historically, FCIP has primarily covered traditional field crops (such as wheat, corn, and soybeans). Although specialty crops now account for a larger and growing proportion of farmers' insured liability, field crops continue to predominate (Figure 1). Federal Crop insurance Coverage FCIP provides farmers with risk management tools to address crop yield and/or revenue losses on their farms. Under the program, farmers can purchase subsidized policies that pay an indemnity when their production or revenue falls below a guaranteed level. The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et seq.). USDA's Risk Management Agency (RMA) operates the Federal Crop Insurance Corporation (FCIC), which is the funding mechanism for the program. Insurance policies are sold and completely serviced through approved private insurance companies. The insurance companies' losses are reinsured by USDA, and their administrative and operating costs are reimbursed by the federal government. Figure I. Total Insured Liability for Specialty Crops Compared to All Crops, 1 989-2020 $ bins 140 120... ... 1 LI 20 Source: CRS using RMA Summary of Business data (accessed March 2022). Data include Whole Farm Revenue Protection policies. Other information is available from RMA's most recent annual Report to Congress, Specialty Crops Report 2021. In purchasing a crop insurance policy, a producer selects a level of coverage (i.e., deductible) and pays a portion of the premium-or none of it in the case of catastrophic coverage-which increases as the level of coverage rises. The federal government pays the rest of the premium (62%, on average). Premium subsidies received by all U.S. agricultural producers totaled $6.3 billion in 2020. Total insurance protection (liability) for all federally insured crops (excluding livestock) was $114 billion in 2020. Specialty C rop Coverage In statute, the term specialty crops refers to fruits and vegetables, tree nuts, dried fruits, and horticulture and nursery crops (including floriculture) (7 U.S.C. 1621 note). This definition covers roughly 400 agricultural commodities, including fresh and processed fruits and vegetables, tree nuts, nursery plants (such as trees, shrubs, flowering plants), herbs and spices, coffee and tea, and honey and maple syrup, according to USDA guidelines. Although various legislative and administrative changes have expanded federal crop insurance coverage for specialty crops, many crops still do not have crop-specific insurance policies. Currently, FCIP policies cover roughly 80 types of fruits, vegetables, tree nuts, and nursery crops. Crops covered by individual FCIP plans include almonds, apples, avocados, bananas, blueberries, cabbage, chili peppers, citrus fruits and trees, coffee, cranberries, cucumbers, fresh and dried beans and peas, figs, fresh market beans, sweet corn, tomatoes, table grapes and raisins, macadamia nuts and trees, mint, mustard, nursery crops (in containers), olives, onions, papaya, pears, pecans, peppers, pistachios, popcorn, potatoes, processing beans, pumpkins, most fresh and processing stonefruit (cherries, apricots, freestone and cling peaches, nectarines, fresh and dried plums), strawberries, sweet corn, sweet potatoes, and walnuts. Apiaries are also covered. Participation is highest in the leading specialty crop producing states, such as California, Washington, Florida, Michigan New York, and Oregon. Participation rates in these states range from about 50% to 70%, with up to 90% participation in Florida. Federal crop insurance policies for specialty crops (and other crops) are generally either yield-based or revenue- based. For most yield-based policies, a producer can receive an indemnity if there is a yield loss relative to the farmer's normal (historical) yield. Insurable causes of loss include drought, excess precipitation, hail, frost, freeze, fire (if due to natural causes), and insects and disease. Revenue-based policies protect against crop revenue loss resulting from declines in yield, price, or both. Nursery crop producers can be protected against plant damage or losses in value due to adverse weather, failure of irrigation water systems, fire, and wildlife. Additional background is available in CRS Report R45459, Federal Crop Insurance: Specialty Crops. Table 1 provides summary statistics of federal crop insurance coverage for specialty crops for 2018 through 2020. It provides total premium, premium subsidies, producer-paid premium, liabilities, indemnities (claim

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