The USDA Risk Management Agency (RMA) has announced the start of a new pilot pistachio crop insurance that will start with the crop year in 2012.
The Pistachio Crop Insurance Program will make coverage accessible to 21 California counties, as well as one in New Mexico and two in Arizona. The names of the counties where the insurance will be available will soon be announced.
The length of the pilot program is anticipated to be two years and the policy will be production based.
The program itself received its initial approval from the Board of Directors at the Federal Crop Insurance Corporation (FCIC) on September 22, 2011. The FCIC is managed and operated by RMA.
Features of the policy will include a brand new approach to dealing with alternate bearing commodities such as pistachios, where production can vary significantly from one year to the next.
Pistachio producers will be able to choose the level of coverage that they want and will have a price election percentage which will continue throughout the length of the policy. As production receives annual reporting, though, there will be recalculation of the yield approval, making changes in the case of anticipated upcoming “on” or “off” years.
There will be year-to-year indemnification of any losses that are incurred.
As the production of pistachios are prone to large yield swings from one year to another, policyholders will not have access to T-Yields, and will be required to provide the insurer with records from at least four years on that specific land.
The orchards become insurable when at least 90 percent of the trees have reached a minimum of ten growing seasons. It isn’t until the twelfth growing season that the alternate bearing adjustment will begin to apply.