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The Risk Management Safety Net:
VIII. Uninsured Crops

The Federal crop insurance book of business was compared with Farm Service Agency data and with NASS estimate information to identify crops that are not insured. Note that all crops are insured in areas where the Adjusted Gross Revenue and Adjusted Gross Revenue-Lite programs are available but these programs were not considered in this comparison because they have had low participation rates.

The list of uninsured crops, in Attachment 2 and sorted by 2011 value from large to small, contains information showing previous studies that have been contracted by RMA for feasibility and the recommendations obtained. In some cases, although the contractors have reported that a crop program was feasible, no program was developed due to producer input. Especially with many of the vegetable crops in the past, producers have indicated to RMA that they did not want a program due to market sensitivity issues. This uninsured crop listing can be used to target future feasibility studies or research into new crop insurance programs.

Two main issues dominate the new product arena for creating new crop insurance products after several years of development of many new crop insurance programs, both RMA contracted products and privately developed products submitted to the Federal Crop Insurance Corporation under the authority of section 508(h) of the Federal Crop Insurance Act. The first is that the lack of credible data is the main limitation of creating a new crop insurance policy. Credible, third party, sustainable yield and price information is necessary to create an actuarially sound insurance product and is often the limiting factor. Secondly, the cost of developing an individual crop insurance policy along with the potential for the value of coverage to producers must also be reviewed before a new product is developed, unless the development is a legislated requirement.

Contact Information

For more information, contact John Shea.