2008 MARYLAND VEGETABLE CROP INSURANCE UPDATE

1. 2008 MARYLAND VEGETABLE CROP INSURANCE UPDATE Wesley N. Musser Department of Agricultural and Resource Economics University of Maryland

2. Crop Insurance Update • How Has Crop Insurance Performed in Maryland? • Participation, Payouts, and Premiums over time • Update on Available Policies

3. MD Vegetable 2007 Crop Insurance Earning Indemnities

4. MD Vegetable 2004 Crop Insurance Earning Indemnities

5. PLANS OF INSURANCE • APH Actual Production History • CRC Crop Revenue Coverage • IIP Indexed Income Protection • GRP Group Risk Plan • AGR Adjusted Gross Revenue • AGR-Lite • Dollar Plan • Fresh Market Sweet Corn • Nursery • Forage Seeding

6. Apples Barley Beans, Processing Corn Forage Production Grain Sorghum Green Peas Oats Peaches Potatoes Soybeans Sweet Corn, Process Tobacco Tomatoes Wheat Actual Production HistoryMARYLAND

7. DOLLAR PLAN CROPSMARYLAND • Fresh Market Sweet Corn • Nursery • Based on Plant Inventory Value • Forage Seeding

8. Available Vegetable Policies in Local Counties • Baltimore and Carroll: Green Peas, Processing Beans, and Fresh Market Sweet Corn • Harford: Processing Beans and Fresh Market Sweet Corn • Howard: None • Special Written Agreements for Other Crops • More Crops Covered??

9. AGRAdjusted Gross Revenue • All Maryland counties except • Allegany, Garrett, Washington • Whole-farm income coverage • Based on tax returns (Schedule F) • Average of last 5 years (1-year lag) • For 2008 insurance year: 2002 – 2006

10. AGRAdjusted Gross Revenue • Coverage for most crops and commodities not otherwise insurable, including: • Row crops • Fruits and vegetables • Christmas trees, turf, nursery • Livestock and animal products (milk, eggs, etc.) • (cannot > 35% total income) • Aquaculture • more

11. AGRSome Restrictions • Excludes timber and forest products and racing and sporting animals • Not more than • 35% income from livestock or animal products • 50% income from commodities purchased for resale • Increased value from post-production not covered • processing, packaging, etc. must be subtracted out • If > 50% income from insurable crops • Crops must be insured under separate policies • Also covered under AGR • AGR premium reduced accordingly • But not more than 50 percent

12. AGR-Lite • Similar to AGR (5 years of Schedule F) • No livestock restrictions (could be 100%) • No requirement to purchase other crop insurance (optional) • Schedule F’s for claim not application • All counties in Maryland

13. Where AGR/AGR-Lite makes sense • Grower of otherwise uninsurable crops • Umbrella over selected individual crop coverages • Interested in simplification • Interested in protecting operation bottom line from severe economic loss • Coverage based on historical quality and prices • Poor yield records • Where gross income survived droughts better than yields • When other plans cost too much

14. Where AGR/AGR-Lite makes sense • Covers revenue at local, historical prices • Covers all crops

15. The Past and the Future • Crop Insurance Has Been a Good Buy for MD Farmers • Improvements and New Policies Are Being Made • See Your Crop Insurance Agent for More Details