The USDA is expanding a crop insurance option to allow organic producers to buy insurance coverage that better reflects their product’s actual value.
Martin Kleinschmit, an organic farmer near Hartington, says he’s pleased with the decision as it will help those transitioning into the business as well as established organic growers.
“It’s definitely on the right track,” Kleinschmit says. “It’s something we’ve struggled with for a long time as organic growers. There’s a huge price difference and some of the practices that we use are not considered, quote, best practices within the commodity industry, so that’s been an issue and for that reason, some of the insurance claims were denied.”
Certified organic growers can now use the contract price addendum to cover their crops at higher prices than traditional crops.
“If you’re selling your organic corn for $12 but yet you can only insure it for $4, there’s no need, no reason to buy the crop insurance to cover the organic,” he says, “and without that risk aversion, it makes it tougher for people who want to transition to the organic.”
Kleinschmit says the USDA making this change will jumpstart organic agriculture in the United States.
“Like a lot of the other insurance programs, it took a little while before they were all covered,” he says. “I fully expect that to happen.”
The Risk Management Agency also expanded organic premium price elections to 57 crops. That’s up from four in 2011. This provides organic producers the option to protect their 2016 crops closer to the market value.
By Jerry Oster, WNAX, Yankton