The U.S. Department of Agriculture’s Risk Management Agency is seeing growth in programs to insure a larger volume and variety of organic and specialty crops, reflecting increased consumer purchases of such products.

While the bulk of the USDA crop insurance program goes toward commodity crops such as corn, wheat and soybeans, the specialty and organic realm is thriving. 

“Over time we’ve tried to expand outside those major crops because you have a growing organic sector, you have a growing specialty crop sector. You have people who are more interested in eating fruits and vegetables. We’ve really tried to make an effort to tap into that more,” said Richard Flournoy, USDA RMA acting administrator, based in Kansas City, Missouri.

Organic food and nonfood product sales totaled $61.9 billion in 2020, breaking the $60 billion mark for the first time, according to the Organic Trade Association.

The USDA RMA’s activities have grown in tandem with this increase. From 1990 to 2020, liabilities for insured specialty crops rose from $1 billion to more than $20 billion. Likewise, from 2010 to 2020, liabilities for insured organic crops rose from $207 million to more than $1.7 billion, and the number of policies has more than doubled.

“As these types of coverages come online and provide risk protection for these farmers – a cherry farmer in Michigan, an avocado farmer in Florida - the farmer has more assurance to step into that field and produce that crop,” said Bob Haney, executive chairman of AgriSompo and CEO of AgriSompo North America, in Des Moines, Iowa.

Mr. Haney said he has seen more inquiries from clients bringing specialty crops to insure, with one example being pistachios. Sompo has also seen growth in coverages for dairy products, as livestock is also under the auspices of the USDA insurance program.

Lockton Cos. LLC has seen growth in the organics sector since it expanded its crop insurance division in 2018, said Ginny Olson, vice president and senior account executive, crop insurance, who joined the broker to help build the business. “My growth has been in the organics space,” she said.

While the commodity crops that constitute the bulk of the USDA program benefit from decades of production data on which to base policy and rate calculations, specialty crops do not. “In Iowa, we’ve grown corn for 50 years. We don’t have 50 years of carrots, celery” and others, Mr. Haney said.

The USDA RMA’s Whole-Farm Revenue Protection plan can help producers of smaller crops by providing a risk management safety net under an insurance policy for all commodities on a farm as opposed to a single commodity crop.

Producers purchased more than 2,000 such policies to protect $2.26 billion in liabilities in 2020, and the RMA is in the process of revising the plan to make it more flexible and accessible to producers beginning in crop year 2022.

Viable insurance for the organics industry is vital for its continued success both because of the industry’s nascent state compared with giant commodities and the added expenses for organic fertilizer and the like, Ms. Olson said.

Sompo recently expanded further into the agriculture sector.  Sompo International Holdings Ltd., a Bermuda-based specialty provider of property/casualty insurance and reinsurance, announced last December the completion of its acquisition of Diversified Crop Insurance Services, a subsidiary of CGB Enterprises Inc.

Diversified was combined with ARMtech, Sompo International’s existing U.S. federally sponsored multi-peril crop insurer, to operate under the brand-name AgriSompo North America

with combined gross written premiums of over $2 billion.