NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the
Advice on Publications Available.Risk and Evaluation Divisions
http://www.act.fcic.usda.gov/research/feasible.html
To contact the agency:
United States Department of Agriculture
Risk Management Agency/Risk Management Education
Room 6755, Stop Code 0803
1400 Independence Avenue, SW
Washington, DC 20250-0803
Email: craig_witt@wdc.fsa.usda.gov
The mission of the Research and Evaluation Division is to:
The general requirements for adding a new crop, that is, the data requirements of the Risk Management Agency (RMA) to develop a new risk management program, so that insurance can be considered for a specific crop program, are as follows:
The criteria for a new crop program to be considered for risk management evaluation, as listed by the Agency, are as follows:
A. New Program Request Criteria
1. All new crop program requests should include:
a. A petition, letter, or similar request from producers or a growers' association, or a recommendation from an RMA Regional Service Office, requesting coverage of a new crop/program and indicating how a minimum 10 percent level of participation by growers in the area of the request will be achieved.
b. An estimate of the acreage of the crop/program in the area, and the percentage that the program's acreage comprises of all crops grown in the area.
c. An estimate of the value of the crop/program in the area, and the percentage that the value of the crop/program comprises of all crops grown in the area.
d. An estimate of the average percent contribution of the crop/program to individual farm income for those producers of the program in the area.
e. An estimate of the economic significance of the crop/program to the area for the next five years, and the reasons for any significant expected changes.
2. Priority consideration will be given to requests that, for the most recent year, meet at least one of the following criteria (include data for the past five years):
a. The annual value of the crop/program exceeds $3,000,000 within the National Agricultural Statistics Service Crop Reporting District in which coverage is requested.
b. The annual value of the crop/program exceeds $9,000,000 within the State in which coverage is requested.
c. The annual value of the crop/program exceeds $15,000,000 in all states served by the RMA Regional Service Office in which coverage is requested.
d. The annual U.S. value of the crop/program exceeds $30,000,000.
B Risk Profile and Analysis
These data should be based on historical information for the program.
1. Perils Affecting the Crop/Program Being Considered
Determine the frequency, severity, and time of occurrence with respect to the growing cycle/insurance period of the crop for each of the following:
a. Natural Perils (e.g., fire, drought, hail, etc.)
b. Economic Perils. (See Section E below.)
c. Human Perils. Examples include failure to follow recognised good farming practices for the insured crop, moral and morale hazards, adverse selection, theft, etc.
2. Loss Valuation
a. Identify the valuation of damage; quality measurements and deficiencies; alternative uses and salvage values; and quality and availability of production records.
b. Identify the timing and costs of inputs as they relate to crop development, calendar dates, and the proposed insurance period.
c. Identify the units of measurement for production (for the amounts guaranteed and the amounts counted in the event of loss), including grade or other defining characteristic; e.g., bushels of U.S. No. 1 commodity, "marketable" pounds, etc.
3. Loss Control Techniques/Tools Currently Available for the Program
a. Production Risk. Can losses be prevented or mitigated by use of irrigation, avoiding varieties susceptible to loss, application of pest control measures, use of frost protection methods, site selection, cultivar selection, cultural practices, reconditioning or salvaging the crop to reduce the financial impact of the loss, etc.?
b. Market Risk. (See Section E.)
4. Insurance Experience of Other Programs in the Area (RMA will determine this.)
5. Potential Impact of the Proposed Program
Identify the potential impact of offering the proposed program on insured and uninsured producers of this crop and other crops in the area, State, and U.S.
C Actuarial Sufficiency and Data Availability
Provide the following data or indicate the availability of:
1. Individual and area production records that identify acreage and actual yields
2. Records or budgets that identify production costs (Section 2B(b) above)
3. Marketing data (Section E below)
4. Extension information for the crop
D Agronomic or Aquatic Suitability
Include written recommendations and supporting documentation from the Cooperative State Research, Education, and Extension Service or other research sources covering:
1. The commercial life cycle of the crop (planting dates, maturity dates, number of harvests, and harvest dates)
2. Acceptable varieties/species for the area
3. Cultural factors/practices, and rotation/pesticide requirements
4. Soil needs and limitations for the specific crop and area, and Natural Resources Conservation Service (NRCS) land use capabilities and recommendations
5. Other data relevant to the agronomic or aquatic suitability of the crop/program (e.g., weather/climatic requirements and conditions)
E Marketing Dynamics
These data describe market potential, and thus the economic viability, of the crop (particularly for crops which are relatively new in the area being considered) and market risk. Specifically provide information regarding the following:
1. Market Characteristics and Risk. Identify the risk associated with the post-harvest movement of the crop into marketing channels. Document post-harvest perils that would be affected by events occurring during the insurance period.
2. Marketing Components
a. Pricing - When, where, and how are prices (contract or open market) determined and paid?
b. Grading standards and agencies
c. Marketing orders
3. Market Competition
a. Domestic Market. Provide data documenting crop utilisation and names and addresses of facilities for storage, processing, and fresh market packing.
b. International Market. Identify the quantity of crop produced, exported, and imported; government regulations or agreements which significantly affect exports or imports of
the crop; and eligibility for foreign crop insurance or other government's subsidies.
A number of Feasibility Studies have been completed which investigate the risks associated with crops which are currently uninsured; these crops are usually specialty or new crops.
Extracted summaries from a number of these reports are available as linked documents, with the kind permission of the USDA Risk Management Agency.
Crop Date of study
Aquaculture December, 1998
Artichoke November, 1995
Asparagus August, 1994
Avocado February, 1995
Blueberry February, 1994
Bramble October, 1996
Broccoli August, 1994
Buckwheat November, 1996
Cabbage September, 1995
Cantaloupe December, 1994
Carrot June, 1994
Cauliflower September, 1994
Celery June, 1994
Christmas Tree December, 1995
Crambe November, 1996
Cucumber October, 1995
Eggplant May, 1996
Field-grown Bulb Crops April, 1995
Field-grown Floriculture Crops April, 1995
Garlic May, 1996
Hay October, 1995
Honeydew Melon December, 1994
Hops July, 1995
Lettuce June, 1994
Millet December, 1995
Mint June, 1995
Mushroom April, 1995
Nursery April, 1995
Nut Trees May, 1998
Olive December, 1995
Pineapple June, 1995
Pistachio July, 1995
Snapbean December, 1995
Squash/Pumpkin February, 1996
Strawberry October, 1994
Sweet Cherry April, 1995
Sweet Potato July, 1994
Tart Cherry August, 1996
Turfgrass Sod February, 1995
Watermelon November, 1994
Wild Rice June, 1996
The complete studies identifying the characteristics of the crops in the context of insurability issues and are available on the Internet at:
http://www.act.fcic.usda.gov/research/feasible.html
Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter
Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:
r.fletcher@mailbox.uq.edu.au[
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GK; latest update 17 October 2001 by: RF