Managing risk is an essential part of a successful agricultural operation, and crop insurance is one way for farmers and ranchers to do so. However, for some specialized operations crop insurance choices are not always clear.
Two new resources from the Center for Rural Affairs describe coverage options available for small and organic operations—the Micro Farm program and Contract Price Option, respectively.
“These resources are designed for the small or organic farmer who is wondering if they are getting the best coverage, or if coverage is available for them at all,” said Kate Hansen, policy associate with the Center. “These are two options that reflect specialized operations’ needs.”
The Micro Farm program insures the expected revenue of an agricultural operation, and is designed with small ones in mind. The coverage protects against loss of revenue from commodities grown or purchased for resale during the insurance period.
“With Micro Farm, all agricultural commodities are reported together, and there are no reporting requirements for expenses or expected yields or values for individual commodities,” Hansen said.
Operations eligible for Micro Farm must make less than $350,000 in approved annual revenue, with no more than 50% of total revenue coming from commodities purchased for resale.
For producers growing or transitioning to organic crops, the Contract Price Option can be used to better cover a crop’s value.
“This option allows producers with written contracts from buyers to protect their crops based on their contracted price rather than the price set by the U.S. Department of Agriculture’s Risk Management Agency (RMA),” Hansen said. “Adding it on has the potential to really improve a producer’s coverage.”
The Contract Price Option is only available for acres under contract. Acres with and without contracts can still be insured under the same policy, but those acres not under contract will be factored into a weighted average at the price established by RMA.
To learn more about these programs, view and download the Center’s “Whole Farm Revenue Protection: Micro Farm” and “Strengthening Organic Coverage: Contract Price Option” publications at cfra.org/publications.
Farmers with questions about crop insurance are invited to reach out to the Center for Rural Affairs for one-on-one support. Contact Kate Hansen at kateh@cfra.org or 515-215-1294. The fact sheets and one-on-one support are available in English and Spanish.
Established in 1973, the Center for Rural Affairs is a private, non-profit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.
