USDA to Offer Quarantine Crop Insurance for California Citrus and Avocados
WASHINGTON, June 30, 2009 - Beginning this fall, USDA will offer California citrus and avocado producers limited crop insurance for losses from quarantines for the 2011 crop year.
The pilot quarantine endorsement that USDA's Federal Crop Insurance Corporation (FCIC) Board of Directors has approved, will cover certain types of losses due to quarantines that are imposed by a duly authorized regulatory body. This insurance is designed as an endorsement to existing citrus and avocado policies in California.
Various commodity groups have expressed interest in an insurance program to cover losses due to quarantine for some time; however, the FCIC's authority in this area is limited. While Federal crop insurance program policies may only cover losses due to natural causes, FCIC also has authority to pilot and test new insurance designs to evaluate whether a new risk management approach is suitable for the marketplace, and addresses the needs of producers of agricultural commodities.
The pilot quarantine endorsement policy is designed to mitigate the impact of a qualifying quarantine. A quarantine qualifies if it is due to a pest infestation or disease and is imposed by either USDA's Animal and Plant Health Inspection Service or the California Department of Food and Agriculture. Coverage is limited to actual production losses, mandated crop destruction, and/or unavoidable growth or deterioration that may occur during the quarantine period. Losses will be adjusted under the terms of the underlying base crop insurance policy.
USDA's Federal Crop Insurance Corporation (FCIC) Board of Directors approved the quarantine endorsement pilot crop insurance program on May 7, 2009.
The Quarantine Endorsement pilot program will not cover economic losses due to missed marketing opportunities caused by quarantine in cases where no crop damage has occurred. To be eligible for an insurance claim payment, a grower must follow best management practices to preserve the crop during the quarantine period. If additional treatment costs are required to preserve the crop, these costs are not reimbursable.
The Risk Management Agency, which administers the Federal crop insurance program, anticipates release of program materials in late August or early September, with training for participating crop insurance companies shortly thereafter.
California producers of citrus and avocados are encouraged to contact a local crop insurance agent for additional details before the Nov. 20 sales closing date.
Federal crop insurance program policies are sold and delivered solely through private crop and livestock insurance companies. A list of crop insurance agents is available at the RMA Web site address: http://www.rma.usda.gov/tools/agent.html.