By KEVIN WALKER
Michigan Correspondent
 
WASHINGTON, D.C. — A new cherry pilot program with some unique features is now available in seven states, or 35 counties altogether.
The Federal Crop Insurance Corp. Board met in April to make the insurance available on a limited basis in Michigan, California, Idaho, Montana, Oregon, Utah and Washington. The only cherry producers who can enroll for the insurance in Michigan must live in Grand Traverse or Leelanau counties.

“They’re testing it to see if it works,” said Perry Hedin, executive director of the Cherry Industry Administration Board. “We’d love to see it expand. We hope that they’ll see that it’s beneficial.”
Hedin said it’s clear to him that the insurance is helpful and necessary, but he said the Risk Management Agency (RMA) – the federal agency which oversees the program – needs evidence obtained from a pilot program to justify the new insurance. He said they’ve been working on it for years.

Dennis Janusick, who works at the RMA’s regional field office in Springfield, Ill., said pilots such as this usually take four to seven years to complete, after which the agency evaluates the program and decides whether to make it permanent.

New elements of the program include coverage for losses due to poor quality and low prices. “Low prices is different from the old insurance,” said Michelle Bouchard, a spokeswoman for the RMA in Washington, D.C. “Usually, it’s if you lose your crop. A lot of insurances we have come into play only if you lose your crop in the field.”

This insurance covers against losses due to low yields also, but Bouchard said this particular element is similar to other insurance plans. Low yields, low prices, low quality or any combination of these events are covered. A caveat is that the losses must arise from natural causes, not general market conditions.

Another unique aspect of this insurance is that if a producer hasn’t been in business for at least four years, they can still get the insurance, but the guarantee will be based on the average yield per acre for the county in which the producer lives. This is called transitional revenue, or T-Revenue. Generally, however, the producer will certify historical annual acreage for four years.

Producers will also certify annual revenue records based on a measure of their yield, based either on the “packinghouse door” valuation or after harvest at the point of first delivery. The program will make this determination, which will vary by county.

The pilot program doesn’t include a catastrophic endorsement. Bouchard said this type of endorsement is very popular because it’s inexpensive, but it provides little coverage. Growers will need to have better insurance than a catastrophic endorsement in order to receive federal disaster assistance under the new farm bill.

There are 17 private insurance companies that have been approved to offer the cherry pilot program coverage. The RMA has a list of them, along with a way to search for approved crop agents, on its website at www3.rma.usda.gov/tools/ agents/companies
Crop agents can also be located through local Farm Service Agency offices. The closing date for participation for next year is Nov. 20, 2008.