USDA announced a new way it is supporting farmers transitioning to certified organic production, by expanding a crop insurance option to allow producers to purchase insurance coverage that better reflects their product’s actual value. The expanded coverage is part of USDA’s continued effort to provide farmers with resources needed to meet growing demand for organic products.
“Consumer demand for organic products continues to increase and the industry has experienced remarkable growth, representing more than $39 billion in US retail sales,” says Tom Vilsack, USDA secretary. “This growth creates opportunities for farmers and businesses across the country. Expanding the safety net for farmers wanting to enter the organic market ensures they have the tools and resources they need to meet this growing demand while protecting their operation.”
The organic sector is growing, and certified organic products often return higher profits for farmers. It can take producers three years, however, to transition from conventional to certified organic production. Previously, producers of transitional crops were only able to insure them at the same price as a conventional producer. But today's announcement enables producers to insure transitional crops to their contract price (within approved limits).
Producers transitioning to certified organic production can now use the Contract Price Addendum to cover their crops at a higher price than traditional crops. The Contract Price Addendum allows farmers transitioning to organic production to insure certain crops at their contract price rather than the published USDA Risk Management Agency (RMA) price election.