By Diane Petit
Jason Smith knows that farming is about the risks of Mother Nature: frost, heat, fires, and smoke…and the risks of the marketplace. It seems that this Gonzales, California, winegrape grower faces a new kind of disaster each year. That’s why he and other winegrape growers across the Golden State use Federal crop insurance extensively as a risk management tool for their operations.
“Next year will be our 50th year growing winegrapes here in the Monterey County. Three thousand acres of winegrapes,” said Smith, owner of Valley Farm Management. “I'm second generation. My parents started this back in 1973. It was pretty much a no brainer to have catastrophic insurance, which is 50 percent. It’s not going to cover your growing costs, but it's also not going to be a total loss.”
The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) serves America’s agricultural producers through effective, market-based risk management tools to strengthen the economic stability of agricultural producers and rural communities. RMA manages the Federal Crop Insurance Corporation (FCIC) to provide innovative crop insurance products to America’s farmers and ranchers. Approved Insurance Providers (AIP) sell and service Federal crop insurance policies in every state and in Puerto Rico through a public-private partnership with RMA. Crop and livestock producers can purchase Federal crop insurance policies through crop insurance agents.
Crop insurance offers producers the option to “buy up,” that is, increase the level of coverage. For example, Smith opted to buy up on coverage for a vineyard of Pinot noir winegrapes. “It is our best financial producer and probably our riskiest, as well, because Pinot noir is susceptible to heat. So, we chose to buy up. We have 80 percent coverage here because it's such an important piece of our whole company,” said Smith.
“The California winegrape industry is a huge economic driver. In California alone, the winegrape and wine industry generates over $73 billion in annual economic activity,” said Natalie Collins, President of the California Association of Winegrape Growers, who explained that California winegrapes contribute about $170.5 billion to the U.S. economy annually. Collins said that over 70 percent of California’s vineyard acreage is enrolled in the Federal crop insurance program.
“We are at the mercy of Mother Nature and then we also have the market dynamics that come into play,” said Collins. “Jason Smith is a great advocate for the entire California winegrape industry and has utilized the Federal crop insurance program as they are in such a unique climate over here in the Salinas Valley.”
Smith recommends that crop insurance be part of a farm’s business plan. “The uniqueness of the winegrape business is we've got one shot at it; we’ve got one harvest. If you lose it, you lose a whole year. It is catastrophic if you don't have help,” said Smith. “It has been paramount, especially in the last 10 years, that we have the support of USDA and RMA to give us security to know, if we are in a catastrophic event, that we're going to be able to get to next year.”
“RMA and USDA helping us navigate tough times helps keep us in business, which also helps keep food on your plate, wine in your glass, and whatever else you may need,” said Smith.
To learn more about Federal crop insurance, check out RMA’s Beginners Guide to Crop Insurance. Find a crop insurance agent near you with the Agent Locator Tool. If you're a grape grower, you may also be interested in the newly released Fire Insurance Protection - Smoke Index endorsement, which covers a portion of the deductible of the Grape Crop Provisions when the insured county experiences a minimum number of smoke events.
Source : farmers.gov