Small scale producers, urban farmers and other local food producers have traditionally been underserved by crop insurance when compared with larger producers who sell primarily to wholesale channels. Recognizing this disparity, the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) retained Agralytica to assess how to expand crop insurance coverage to these underserved groups.
Agralytica’s approach encompassed over a dozen listening sessions, engaging with growers and insurance providers across diverse regions. We also met with groups like direct marketers, urban farmers, and people from specialized product categories like floriculture. Dozens of one-on-one interviews with farmers and experts further enriched our understanding of the unique challenges faced by these producers.
We carefully reviewed all existing programs theoretically available to local and urban growers, identifying the ways in which they failed to meet the needs of these groups. This included detailed analysis of the Whole-Farm Revenue Protection (WFRP) program, the Noninsured Crop Disaster Assistance Program (NAP), Nursery Value Select (NVS), and other existing plans of insurance. Agralytica also proposed a new crop insurance program for local food producers based on an entirely new design.
Agralytica’s extensive research revealed there were several ways RMA could improve crop insurance options for local food producers, either by modifying existing plans of insurance or considering the development of a new plan.
In the immediate term, we recommended modifying WFRP by changing the recordkeeping and reporting requirements. This was the simplest and quickest way to improve access to coverage for local food producers. Additional recommendations included:
We delivered the study on the feasibility of insuring local food production in the fall of 2020, which RMA made publicly available. The study represented a significant step towards leveling the playing field for local food producers.
The following year, drawing on Agralytica’s research and recommendations, RMA introduced the Micro Farm Pilot policy. This policy extended coverage to producers with operations generating $125,000 or less, including over 85 percent of all local food producers. The policy not only covered market readiness but also post-production operations. The Micro Farm Pilot policy subsequently expanded to accommodate operations up to $350,000 in size across all 50 states.
