Fresh Tomato Insurance
USDA's Risk Management Agency (RMA) web site is the best source to learn more about the different types of crop insurance available to tomato growers. Essentially, there are two types of products:
The Multiple Peril Insurance Program (MPCI) insures producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects and disease. The farmer selects the amount of average yield to insure, from 50 to 75 percent (in some areas to 85 percent). The farmer also selects the percent of the predicted price - between 55 and 100 percent of the crop price established annually by RMA - to insure. If the harvest is less than the yield insured, the farmer is paid an indemnity based on the difference. Indemnities are calculated by multiplying this difference by the insured percentage of the established price selected when crop insurance was purchased.
The Dollar Plan (DOL) insures against declining value due to damage that causes a yield shortfall. The insured amount is based on the cost of growing a crop in a specific area. A loss occurs when the annual crop value is less than the insured amount.
Some 178 MPCI and DOL policies have been sold to Florida tomato growers in 2003 that protect more than 27,000 acres, or about 60% of the 2002 planted acreage of 45,000 acres. USDA/RMA cautions growers to carefully consider how a crop insurance policy will work in conjunction with their other risk management tools to achieve the best possible outcome.
Managing farm risk is complicated for a host of reasons. Growers do not manage weather risk in isolation but rather as part of more comprehensive strategies that also consider risks posed by price fluctuations and policy changes. Crop insurance agents and other agri-business specialists listed in the USDA/RMA agent locator can assist farmers in developing a good management plan. Risk management tools, such as climate information and crop insurance, often work best when they are used together.