By STEVE BROWN
Starting in 2014, organic farmers seeking federal crop insurance will no longer have to pay a 5 percent higher premium.
The change by the USDA's Risk Management Agency is a response to an audit by the agency's Office of Inspector General.
A review of three years of organic crop insurance policies found that so-called "transitional" yields offered to organic producers overstated the actual production capability of crops grown with organic farming practices.
Transitional yields refers to county averages when producers do not yet have a long-term production history, not to yields during transition from conventional to certified organic operation.
Michael Hand, the RMA's deputy administrator for compliance, said the RMA agreed with the audit, which analyzed the production histories and claims of 48 organic farmers who had losses. It found that 35 of those policies had average actual yields less than 80 percent of transitional yields, and below the yield floor, which indicated production guarantees for these policies were excessive.
It recommended reducing transitional yields for organic crops by 35 percent "or by an appropriate percentage as determined by RMA."
Beginning with the 2014 insurance year, Hand said, RMA will use actual transitional yields for organic crops. Though it is based on thin evidence -- because only a quarter of organic farmers have federal crop insurance -- removing the 5 percent premium is expected to increase participation and the pool of available data.
The National Sustainable Agricultural Coalition, in a news release, said it welcomes the change.
Highly diversified producers may find that insuring crop-by-crop may not be the best approach, NSAC said. In certain states and in certain counties, RMA offers Adjusted Gross Revenue Insurance and a variation known as AGR-Lite.
Also, it said, Whole Farm Diversified Risk Management Insurance, which is a provision included in both the Senate-passed and House Agriculture Committee-passed farm bills in 2012, would be available on a nationwide basis and provide for a diversification bonus.