(March 23) The long and sometimes error-prone process of delivering crop insurance to U.S. specialty crop growers will increase in the years ahead, U.S. Department of Agriculture chief economist Keith Collins told the House Agriculture Subcommittee on General Farm Commodities and Risk Management on March 15.

Collins said crop insurance options for U.S. agricultural producers have increased since the passage of the Agricultural Risk Protection Act in 2000.

Collins cited statistics reflecting greater popularity of federal crop insurance plans. In 2005, he said, 1.2 million policies of federal crop insurance policies were in place with a liability of $44 billion, covering 246 million acres and 320 commodities.

That compares to 1.3 million policies in 2000 that covered $34 billion on 206 million acres.

Part of that growth came from the specialty crop arena, Collins said.

Collins did not provide a more detailed breakdown of the insurance policies written for specialty crops compared with row crops.

He said insurance products that offer whole farm or revenue protection also have shown growth. Of those products, Collins said the revenue assurance plan has been the most popular product.

That plan has increased total insurance liability from less than $700 million in 2000 to more than $13.5 billion in 2004, he said.

The Agricultural Risk Protection Act increased premium subsidies for farmers, and Collins said that has resulted in greater purchases of insurance coverage beyond the minimal catastrophic level.

Collins said the USDA’s Risk Management Agency is administering 26 pilot programs for the 2006 crop year, some of which are for specialty crops.

He said creating permanent insurance plans for specialty crops is time consuming.

Other officials from the agency have said previously the process from concept to implementation can take as much as a decade.

Collins said the process includes a feasibility study, a policy development study, three to five years of piloting the program and then evaluation of the results and conversion of the product to a permanent policy through a comment period and rule making.

Collins noted that a difficult example has been the sweet potato pilot program. Originally rolled out as a pilot in 1998 in eight counties, it was plagued with high losses, which Collins said indicated underwriting and loss adjustment problems.

After several years of tweaking the program, the agency discarded the original program for sweet potatoes and introduced a new version in October 2003.

Sue Johnson-Langdon, executive director of the North Carolina SweetPotato Commission, Smithfield, said the new crop insurance pilot program works better than the first pilot.

“We wanted the program to continue in North Carolina, but with changes,” she said.

First of all, she said the number of counties offered the pilot expanded from two to about 10, and there is less risk of fraud in the new pilot program.

“What the (first) crop insurance pilot did was it spawned new growers coming into a vegetable market that is supply and demand driven,” she said.

The second version of the pilot requires growers to have produced sweet potatoes for three of the past five years, and also calculates loss based on the whole farm and not an individual fields.

The second pilot has provided stability where none existed before, she said.

Another complicated crop insurance program has been the Florida Fruit Tree Program, Collins said.

The insurance product was designed to indemnify producers for destroyed trees, including those trees pushed over as a result of canker.

However, the rapid spread of canker after last fall’s hurricanes caused the USDA to raise the premium and reconsider how the government’s new policy of canker containment would be reflected in the program.

Collins said the USDA is still working out the details of the Florida tree program.