2002 Report to Congress 

New and Specialty Crops 

Risk Management Agency 

U.S. Department of Agriculture 
The Honorable Tom Harkin 

Chairman 

Committee on Agriculture,

 Nutrition, and Forestry 

United States Senate 

731 Hart Senate Office Building 

Washington, DC 20510-0605 

Dear Mr. Chairman: 

As required by Section 508(a)(6)(B) of the Federal Crop Insurance Act, as amended, the Risk 

Management Agency (RMA) is submitting the enclosed annual report on expanding crop 

insurance coverage to new and specialty crops. 

The Agricultural Risk Protection Act of 2000 (ARPA) significantly changed the manner in which 

RMA conducts research and development of new risk management programs and is addressed in 

a separate section in this report. The Farm Security and Rural Investment Act of 2002 (2002 

Farm Bill) includes provisions that impact producers of specialty crops and is also addressed in a 

separate section in this report. 

This year's annual report includes an update on projects initiated during FY 2001 and 2002 as well 

as project plans for FY 2003 through 2005. The details included in this report indicate the 

enormous amount of program research, development, and evaluation activity undertaken by RMA 

and its partners for new and specialty crop programs. This year's activity is summarized by the 

following key initiatives: 

· planning and implementing more than 40 new projects during FY 2002 through contracts 

and partnerships with various public and private entities (including partnerships under a 

Request for Applications RMA announced July 1, 2002); 

· overseeing and managing contracts and partnerships awarded during FY 2000 and 2001, 

including the review of deliverables from contractors and partners; 

· implementing new and expanded risk management tools for producers; 

· educating producers on risk management issues and opportunities; and 

· training of RMA staff in the management of contracts and partnerships to facilitate the 

leveraging of resources for new and specialty crops research and development. 

An Executive Summary at the front of the report highlights many of this year's accomplishments 

on behalf of new and specialty crops producers. 

Sincerely, 

Ross J. Davidson, Jr. 

Administrator 

Enclosure 

i 
The Honorable Larry Combest 

Chairman 

U.S. House Committee on Agriculture 

1301 Longworth House Office Building 

Washington, DC 20515 

Dear Mr. Chairman: 

As required by Section 508(a)(6)(B) of the Federal Crop Insurance Act, as amended, the Risk 

Management Agency (RMA) is submitting the enclosed annual report on expanding crop 

insurance coverage to new and specialty crops. 

The Agricultural Risk Protection Act of 2000 (ARPA) significantly changed the manner in which 

RMA conducts research and development of new risk management programs and is addressed in 

a separate section in this report. The Farm Security and Rural Investment Act of 2002 (2002 

Farm Bill) includes provisions that impact producers of specialty crops and is also addressed in a 

separate section in this report. 

This year's annual report includes an update on projects initiated during FY 2001 and 2002 as well 

as project plans for FY 2003 through 2005. The details included in this report indicate the 

enormous amount of program research, development, and evaluation activity undertaken by RMA 

and its partners for new and specialty crop programs. This year's activity is summarized by the 

following key initiatives: 

· planning and implementing more than 40 new projects during FY 2002 through contracts 

and partnerships with various public and private entities (including partnerships under a 

Request for Applications RMA announced July 1, 2002); 

· overseeing and managing contracts and partnerships awarded during FY 2000 and 2001, 

including the review of deliverables from contractors and partners; 

· implementing new and expanded risk management tools for producers; 

· educating producers on risk management issues and opportunities; and 

· training of RMA staff in the management of contracts and partnerships to facilitate the 

leveraging of resources for new and specialty crops research and development. 

An Executive Summary at the front of the report highlights many of this year's accomplishments 

on behalf of new and specialty crops producers. 

Sincerely, 

Ross J. Davidson, Jr. 

Administrator 

Enclosure 

ii 
2002 Report to Congress: New and Specialty Crops 

Executive Summary 

This 2002 Report to Congress: New and Specialty Crops provides an overview of an exciting 

year of activity in the Risk Management Agency's (RMA) progress toward expanding crop 

insurance coverage under the Federal Crop Insurance Act (the Act) to new and specialty crops. 

This progress has been achieved on behalf of the Federal Crop Insurance Corporation (FCIC) and 

with the support of FCIC's and RMA's many partners. These partners include producers, 

producer groups, insurance providers who are reinsured by FCIC, contractors, partnership 

organizations, universities, other Federal agencies, State departments of agriculture and other 

State offices, Federal and State Congressional representatives, insurance industry trade 

associations and organizations, taxpayers, and others who have contributed to the substantial 

progress realized during this past year. 

There was a time when, for many people involved with crop insurance, the term "producers" 

essentially included those who grew traditional crops. Today, because of the progress achieved in 

the research, development, and implementation of new risk management programs for specialty 

crops, the term has taken on a new meaning. Now the term goes beyond those who grow 

traditional crops, and even beyond those who grow what may be termed as non-traditional or 

specialty crops. Today the term is more universally understood to include those who farm the 

ocean or raise aquaculture in other controlled environments, those who raise livestock, ranchers, 

timber producers, beekeepers, and others with what are often considered more specialized 

agricultural endeavors. 

As the faces of agriculture and crop insurance are changing, the manner in which RMA 

accomplishes its mission is perhaps changing even more. First, RMA has transformed itself from 

a risk management program developer to a regulator, facilitator, and evaluator of new products 

and materials. Second, RMA's risk management programs are no longer confined to crop 

insurance. For example, the Dairy Options Pilot Program offers dairy producers education 

concerning risk management opportunities outside the realm of crop insurance. Third, livestock 

insurance programs are now available to producers for the first time in the history of the Federal 

Crop Insurance program. Fourth, other risk management education programs provide producers 

a wealth of information and support to enable them to better determine how to manage their risks.

 Fifth, and possibly even more significantly, within the next few years new risk management tools 

will become available as new approaches to risk management are proposed and implemented. As 

indicated below, a significant number of new and innovative risk management solutions are under 

research and development to help America's diverse agricultural producers cope with the 

problems they face. 

Many of these changes are taking place as a result of the June 2000 enactment of the Agricultural 

Risk Protection Act of 2000 (ARPA). Last year's 2001 Report to Congress: New and Specialty 

Crops addressed the ARPA changes that have already impacted specialty crops producers and are 

expected to affect the development of future risk management programs for producers of new 

crops (not previously insured) and specialty crops. This year's report provides an update on the 

processes and projects initiated, and offers a more current look at what is on the horizon for 

agricultural risk management through RMA, FCIC, and our partners. 

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RMA and its partners have refined the processes utilized to conduct research and development of 

new programs through private and public organizations. The private sector product development 

system mandated by ARPA is fully implemented and has spurred a flurry of development. This is 

a serious and intense process that requires a much more significant amount of time, expertise, 

administrative support, Board of Directors support, and expense than is apparent on the surface. 

The efforts of those in the private and public sector who have helped and supported the process to 

make it work are to be commended and are indeed appreciated. 

The results of these efforts to implement ARPA and other provisions of the Act are visible as risk 

management tools for producers that are currently being researched or studied, developed and 

reviewed, implemented and utilized by producers, and maintained and evaluated. This report 

provides information on a number of specific projects that are underway through the following 

major initiatives: 

· overseeing and managing contracts and partnerships awarded during Fiscal Year (FY) 

2000 and 2001, including coordinating and conducting the review of deliverables from 

contractors and partners; 

· planning and implementing a number of projects through contracts and partnerships with 

various public and private entities; to include developing, announcing, and subsequently 

awarding projects submitted under a Request for Applications (RFA) for the research and 

development of new risk management tools for producers; 

· implementing new and expanded risk management tools for producers; 

· educating producers on risk management issues and opportunities; and 

· training RMA staff in the management of contracts and partnerships to facilitate the 

leveraging of resources for new and specialty crops research and development. 

Projects that are expected to offer significant potential to improve the risk management 

opportunities for producers of new and specialty crops are listed below. A number of other 

projects that will impact producers of new and specialty crops are addressed in this year's report 

and are in various stages of development, including the preparation for submission of proposals. 

· Aquaculture Pilot Program Research and Development 

· Biomass Feasibility Study 

· Buckwheat Loss Appraisal Methods and Loss Adjustment Standards Handbook 

Modifications 

· Cost of Production Pilot Program Development 

· Cut Flowers and Cut Floral Greens Pilot Program Feasibility Study 

· Direct Marketing of Perishable Agricultural Crops Feasibility Study 

· Dollar Plan Research 

· Evaluating the use of Satellite Remote Sensing for Crop Loss Adjustment 

· Expanding Crop Insurance Coverage to Include Federal Agency Actions 

· Forecasting the Occurrence of Potato Late Blight 

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· Fresh Vegetables Pilot Program Feasibility Study 

· Hawaii Tropical Fruits and Trees Pilot Program Feasibility Study and Program 

Development 

· Investigation of Producers' Management of Storage Problems for Onions 

· Lawn Seed Pilot Program Feasibility Study 

· Livestock Disease Risk Management Program Feasibility Study 

· Livestock Risk Management Tools Feasibility 

· Organics Feasibility Study 

· Partnership Agreement Projects submitted under the RFA referenced above: 

o Determine the Feasibility of, and Develop a Financial Derivative Product 

Specifically Designed to Protect Against Season Average Price Uncertainty 

o Develop a Climate and Soil Hazard Information System that Enables Producers to 

Analyze Potential Risks to Crops and Livestock 

o Develop a Comprehensive Set of Decision Support Tools (InsuranceVision) 

Designed to Assist Producers in Selecting the Most Effective Risk Management 

Strategies 

o Develop Decision Aids and Tools to Assess Climate-Related Economic Risks in 

Peanut and Tomato Production Systems; and Develop a Decision Aid to Reduce 

Fertilizer use and Environmental Exposure in Potato Crops 

o Develop a Direct Marketing Strategies Selection Tool for Organic Producers 

o Develop an Insurance Product that Reduces Liability when Conducting Prescribed 

Fires on Private Forest Land 

o Develop an Internet-Based Burning Risk Advisory System using Biophysical 

Vegetation Models, Near Real-Time Weather, and Greenness Indices 

o Develop a Risk Management System Based on an Artificial Neural Network 

Designed to Utilize Short-Term Weather Data to Predict Frost and Reduce Risk 

for Horticultural Crop Producers, Especially Fruit Crops, in the Southeastern U.S. 

o Develop an Understanding of Food Chain Bioterrorism Threats, Implications on 

the Farming Sector, and Interim Solutions 

o Develop a Web-Based Software Tool for use by Potato Growers, Water 

Managers, and Risk Management Personnel to Reduce Exposure to Drought Risk 

in Potato Cropping Systems 

o Establish Ag Labor Cooperatives as Risk Management Tools for LimitedResource and Small Family Farms in Florida and Mississippi 

o Evaluate the Feasibility of Weather Insurance for Noninsured and Specialty Crops 

and Development of a Web-Based Weather Risk Management Tool 

o Examine the Use of Weather Station Data to Create Yield Insurance for 

Underserved Agricultural Commodities 

o Research and Develop Apiculture (Beekeeping) Risk Management Options 

o Research and Develop Triticale Risk Management Options 

· Pasture and Rangeland Program Feasibility Study and Program Development 

· Perennial Pathogen Destruction Pilot Program Feasibility Study 

· Pilot Program Evaluations for a number of new and specialty crops 

· Product Portfolio Study 

· Quality Review of Dry Bean and Sugar Beet Crop Insurance Policies 

· Quality Review of Specialty Crop Policies (Almonds, Apples, Figs, and Pears) 

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· Quarantine Pilot Program Feasibility Study 

· Revenue Coverage Plans Feasibility Study and Program Development 

· Revenue Insurance for Cattle and Hog Producers 

· Risk Management Stabilization Accounts 

· Silage Sorghum Program Research and Development 

· Specific Weather Peril Insurance Feasibility Study 

· Studies of Specialty Crop Insurance Utilization, Needs, and Market Potential in California, 

Florida, New York, and Pennsylvania 

· Tree, Vine, and Bush Replacement Program Feasibility Study 

· Value Enhanced Products Research Report 

In addition to the above projects, and other new projects discussed in this year's report, 

approximately 30 pilot risk management programs are currently being tested and evaluated for 

conversion to permanent programs. They too are listed in the report along with the year they 

were introduced. The conversion of these pilot programs to permanent program status and the 

research and development of the new initiatives undertaken by RMA and its private- and publicsector partners will greatly improve the risk management opportunities for producers of new and 

specialty crops. 

This year's report contains the largest listing in FCIC's history of risk management programs in 

use by producers and new programs being researched, developed, and evaluated. It also verifies 

that agricultural risk management truly extends far beyond crop insurance, and that many new and 

exciting things are happening in the crop insurance and agricultural risk management field! 

Additional information about RMA and the Federal Crop Insurance program is available through 

RMA's home page at http://www.rma.usda.gov/. 

Ross J. Davidson, Jr. 

Administrator, RMA 

vi 
CONTENTS 

Letters of Transmittal from the Administrator................................................................ i-ii 

Executive Summary.........................................................................................................iii 

INTRODUCTION .......................................................................................................... 1 

C Purpose.................................................................................................... 1 

C Authority ................................................................................................. 1 

C Action...................................................................................................... 1 

SPECIALTY CROPS COORDINATOR......................................................................... 2 

C Authority ................................................................................................. 2 

C Action...................................................................................................... 2 

ACTIVE PILOT RISK MANAGEMENT PROGRAMS FOR THE 2003 CROP YEAR. 3 

THE AGRICULTURAL RISK PROTECTION ACT OF 2000 (ARPA).......................... 4 

C Introduction and Background................................................................... 4 

C Update on Projects Initiated During FY 2001........................................... 6 

C Projects Initiated During FY 2002.......................................................... 13 

C New Pilot Programs Introduced Beginning the 2002 Crop Year ............. 19 

C Conversion and Expansion of the Pilot Millet Crop Insurance Program... 20 

C Continuation and Conversion of the Pilot Blueberry Insurance Program . 21 

C Expansion and Conversion of the Pecan Revenue Pilot Program............. 21 

C Projects to be Initiated During FY 2003 ................................................. 22 

PROGRAM EXPANSION PLANS BEYOND FY 2003............................................... 26 

C Introduction........................................................................................... 26 

C Program Research and Development Plans for FY 2004 ......................... 26 

C Program Evaluation Plans for FY 2004 .................................................. 27 

C Program Research and Development Plans for FY 2005 ......................... 27 

C Program Evaluation Plans for FY 2005 .................................................. 28 

THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002 ...................... 29 

C Introduction and Background................................................................. 29 

C Risk Management Provisions Impacting Specialty Crop Producers ......... 29 

PUBLIC AWARENESS AND INPUT OF PRODUCERS AND ORGANIZATIONS... 31 

C Internet Web Sites.................................................................................. 31 

C Risk Management Education.................................................................. 31 

C RMA Community Outreach.................................................................... 33 

C Consultations with Producers and Producer Groups ............................... 34 

C Miscellaneous Activities ......................................................................... 34 

APPENDIX Ag Commodities Insured under 2003 Crop Insurance Programs ............. 35 

vii 
INTRODUCTION 

Purpose 

This report provides information on the expansion of crop insurance coverage to new and 

specialty crops that has occurred from December 2001 through September 2002, and expansion 

plans for FY 2003 and beyond. The report also identifies a number of other agricultural risk 

management initiatives and projects that are being planned, researched, and developed outside the 

realm of crop insurance, including other risk management tools for producers and risk 

management education and outreach programs. 

Authority 

Section 508(a)(6)(B) of the Federal Crop Insurance Act, as amended (the Act), provides that the 

Corporation shall annually report to Congress on the progress and expected timetable for 

expanding crop insurance coverage under the Act to new and specialty crops. 

Action 

In accordance with the above purpose and authority, the Risk Management Agency submits this 

report on behalf of the Federal Crop Insurance Corporation. 

1 
SPECIALTY CROPS COORDINATOR 

Authority 

Section 507(g) of the Act provides as follows: 

"(g)(1) The Corporation shall establish a management-level position to be known as the Specialty 

Crops Coordinator.

 (2) The Specialty Crops Coordinator shall have primary responsibility for addressing the 

needs of specialty crop producers, and for providing information and advice, in connection with 

the activities of the Corporation to improve and expand the insurance program for specialty crops.

 In carrying out this paragraph, the Specialty Crops Coordinator shall act as the liaison of the 

Corporation with representatives of specialty crop producers and assist the Corporation with the 

knowledge, expertise, and familiarity of the producers with risk management and production 

issues pertaining to specialty crops.

 (3) The Specialty Crops Coordinator shall use information collected from Corporation field 

office directors in States in which specialty crops have a significant economic effect and from 

other sources, including the extension service and colleges and universities." 

Action 

William C. (Bill) Jones has served as the Risk Management Agency's (RMA) Specialty Crops 

Coordinator since March 1996. His position is located in the Research and Evaluation Division 

under the Deputy Administrator for Research and Development. During his tenure as Specialty 

Crops Coordinator, the Agency achieved the largest expansion of pilot programs for new and 

specialty crops in its history. Thirteen new and specialty crop initiatives were introduced for the 

1999 crop year, and eight new and specialty crop initiatives were introduced for the 2000 crop 

year. In addition, 11 pilot crop insurance programs were expanded during the 1999 and 2000 

crop years. 

With the enactment of ARPA and the subsequent research and development of new policies 

through public and private entities, the Specialty Crops Coordinator's efforts were directed 

toward facilitating the research and development of new policies through contracts, cooperative 

agreements, and partnerships. The Specialty Crops Coordinator participated in meetings; field 

visits; training sessions; speaking engagements; and other contacts with growers, grower 

association representatives, the insurance industry, Congressional representatives, and internal 

organizations. These efforts were made to communicate the Agency's new and specialty crops 

programs and gather information on needs and interests of producers. This report includes the 

most comprehensive listing of pilot risk management programs, planned research and 

development projects, and risk management education and outreach projects in Mr. Jones' tenure 

as Specialty Crops Coordinator for the Federal Crop Insurance Corporation (FCIC). 

2 
ACTIVE PILOT RISK MANAGEMENT PROGRAMS FOR THE 2003 CROP YEAR 

Following are the 30 active pilot programs currently available by RMA and approved insurance 

providers, along with the plan of insurance as appropriate and the year they were introduced. The 

24 pilot programs that include specialty crops are shown in bold print. This listing does not 

include private products submitted under section 508(h) of the Act. Details on these pilot 

programs can be found at the RMA web site: http://www.rma.usda.gov/pilots/. 

Adjusted Gross Revenue (AGR plan of insurance) - 1999 

Apple Pilot Quality Option - 2001 

Avocados (Revenue plan) - 1998 

Avocados (APH) - 1999 

Avocado/Mango Trees (Tree Based Dollar Amt. of Ins.) - 1998 

Blueberries (GYC)- 1995 

Cabbage (GYC) - 1999 

Cherry (Fixed Dollar) - 1999 

Citrus Fruit [Navel Oranges] (Fixed Dollar) - 2001 

Corn Rootworm Integrated Pest Management - 1998 

Coverage Enhancement Option - 2000 

Crambe (APH) - 1999 

Cultivated Clams (Aquaculture Dollar) - 2000 

Cultivated Wild Rice (GYC) - 1999 

Dairy Options – FY 1998 

Florida Fruit Trees (Tree Based Dollar Amt. of Ins.) - 1996 

Forage Seed (APH) - 2002 

Fresh Market Beans (Dollar Amt. of Ins.) - 2000 

Income Protection plan of insurance (IP)- 1996 

Mint (APH) - 2000 

Mustard (APH) - 1999 

Onion Pilot Stage Removal Option - 2000 

Pecan (Pecan Revenue plan) - 1998 

Processing Chile Peppers (Fixed Dollar) - 2000 

Processing Cucumbers (Fixed Dollar) - 2000 

Rangeland (Group Risk Plan) - 1999 

Raspberry/Blackberry (Fixed Dollar) - 2002 

Strawberries (Fixed Dollar) - 2000 

Sweetpotatoes (APH) - 1998 

Winter Squash [including pumpkins] (Dollar Amt. of Ins.) - 1999 

Expansion of Pilot Programs. As a general rule, expansion of a pilot program during the pilot 

period is considered only if such expansion will provide different program experience (such as 

different crop types or practices than the original pilot program) than may be gained from the 

original pilot program. 

Summary of Business. Summaries of the insurance experience of these pilot programs and other 

crop insurance programs can be found at the RMA web site http://www.rma.usda.gov/data/. 

3 
THE AGRICULTURAL RISK PROTECTION ACT OF 2000 (ARPA) 

Introduction and Background 

The Agricultural Risk Protection Act of 2000 (ARPA) was enacted (1) to strengthen the safety 

net for agricultural producers by providing (a) greater access to more affordable risk management 

tools and (b) improved protection from production and income loss, (2) to improve the efficiency 

and integrity of the Federal crop insurance program, and (3) for other purposes. This report 

concentrates on those activities most directly related to the research and development of risk 

management tools for new and specialty crops. 

Section 131 of ARPA prohibited the research and development of any new policies by the 

Corporation for an agricultural commodity offered under the title. Section 131 also authorized 

the Corporation to enter into contracts and partnerships for research and development, and 

provided funding for the new contracts and partnerships. These provisions significantly changed 

the way RMA conducts its business. 

Section 132 of ARPA authorized the Corporation to insure livestock for the first time in its 

history and defined livestock to include, but not be limited to, cattle, sheep, swine, goats, and 

poultry. Two pilot programs were approved beginning in 2002 under the provisions of section 

508(h) of the Act. They are: 

· The Livestock Gross Margin (LGM) Pilot Program. This program, submitted by Iowa 

Agricultural Insurance Innovations, provides coverage to swine producers from price risks 

for 6 months, and up to 15,000 hogs per period. The product protects the gross margin 

between the value of the hogs and the cost of corn and soybean meal. Prices are based on 

hog futures contracts and feed futures contracts. LGM protects producers if feed costs 

increase and/or hog prices decline, and is based on the coverage level selected by the 

producer, with coverage levels ranging from 85 to 100 percent. The LGM Pilot Program 

is available in all 99 counties in Iowa. 

· The Livestock Risk Protection (LRP) Pilot Program. This program, submitted by the 

American Agri-Business Insurance Company, protects against a drop in hog prices. Swine 

can be insured for 90, 120, 150, or 180 days, and up to a total of 32,000 animals per year.

 Unlike traditional crop insurance policies that have a single sales closing date each year, 

LRP is priced and available for sale continuously throughout the year. The LRP policy 

protects producers against declining hog prices if the price index specified in the policy 

drops below the producer's selected coverage price. Coverage levels range from 

approximately 70 to 95 percent of the daily hog prices. The LRP Pilot Program is 

available in all 99 counties in Iowa. 

Section 523(b)(10) of the FCI Act imposes limitations on expenditures associated with all 

livestock crop insurance programs – other than research and development costs covered by 

section 522. For FY 2002 the limitation was $10 million. Note that Section 523(b)(10) does not 

provide any funding. Rather, it places a limit on the use of funds that must be obtained elsewhere.

 Effectively, these limits define FCIC’s livestock underwriting capacity. In order to assure 

compliance with these limits, RMA allocated each of the approved programs specific dollar 

4 
 

 

amounts of underwriting capacity ($3 million each), and created a tracking system that would 

allow it to shut off new sales if the limits were reached. Following is a report of the underwriting 

capacity allocated and used during FY 2002, as well as the unused remainder at the end of the 

year. 

Underwriting Capacity 

Program Allocated Used Remaining 

Thousand $ 

Livestock Risk Protection (LRP) $3,000 $208 $2,792 

Livestock Gross Margin (LGM) $3,000 $ 74 $2,926 

Reserve $4,000 $ 0 $4,000 

Total $10,000 $282 $9,718 

In addition to the above livestock risk management programs, RMA is exploring other livestock 

risk management possibilities as explained in the sections (1) Update on Projects Initiated During 

FY 2001, (2) Projects Initiated During FY 2002, and (3) Projects Expected to be Initiated During 

FY 2003. 

Wild Salmon. Section 132 of ARPA amended section 523 of the Act to authorize the 

Corporation to include pilot programs providing insurance protection against losses involving 

wild salmon (after October 1, 2001). On February 13, 2001, RMA entered into an agreement 

with the Cooperative State Research, Education, and Extension Service (CSREES) and the 

University of Alaska, Fairbanks, Agricultural and Forestry Experiment Station to research the 

feasibility of developing a risk management strategy for wild sockeye salmon that addresses the 

economic needs of Bristol Bay fishermen. The feasibility study was completed and generally 

indicated that it is not feasible to develop a wild salmon crop insurance program for Bristol Bay. 

RMA is currently evaluating the potential for other risk management alternatives to mitigate the 

risks faced in the wild salmon industry. 

RMA Activities Subsequent to the Enactment of ARPA. The first 2 years of ARPA were 

challenging for RMA. The Agency needed to quickly implement a number of provisions and to 

establish plans, procedures, guidelines, and processes to implement others in order to utilize 

available funding effectively. This took place while the Agency continued to maintain, evaluate, 

and modify existing permanent and pilot programs. RMA in particular emphasized: 

C Gathering information for the purpose of coordinating and expanding crop insurance 

coverage to new and specialty crops through contracts, cooperative agreements, 

partnerships, and other relationships with public and private entities; 

C Developing and maintaining a variety of organizational planning, reporting, and project 

management processes and documents; 

C Training in various aspects regarding contracting and partnering with other parties for the 

research and development of new risk management products for producers; 

C Consulting with producer groups before entering into a contract for research and 

development to increase participation in areas or for agricultural commodities that may be 

underserved by the Federal crop insurance program; 

C Coordinating and facilitating the development of various guidelines and processes for 

5 
conducting the research and development of new risk management tools through contracts 

and agreements; 

C Developing, implementing, and managing a variety of contracts, contract task orders, 

cooperative agreements, and other vehicles used to conduct the research and development 

of new risk management tools through other public and private entities; 

C Developing, providing input for, presenting, and reviewing a wide variety of presentations, 

correspondence, reports, and updates on plans, activities, and results regarding new 

program research and development; 

C Reviewing a large number of deliverables and participating in a significant number of 

presentations provided to RMA by contractors and partners; and 

C Initiating and participating in a large number of risk management education and outreach 

programs, with a priority for programs reaching producers of commodities not currently 

covered by crop insurance; specialty crops; underserved States, areas, and commodities; 

and small and limited-resource producers. 

Procurement Sensitivity of Information Related to Contracts and Partnerships. Details on 

programs developed through contracts and agreements with other parties are subject to certain 

restrictions, including the release of potentially procurement-sensitive information. At some point 

during the developmental process, it is possible that a decision will be made not to proceed with 

initiating the proposed program(s). Instead, a decision may be made to gather more data for 

analysis, modify the proposed program, or discontinue efforts to develop the program. As an 

example, producer groups may determine that they are no longer interested in a program being 

developed or that they prefer a different approach than the one they originally recommended. 

Also, a private product may be developed and made generally available that would preclude RMA 

from continuing research and development efforts for a program covering the same risk. 

Plans of Insurance Submitted under Section 508(h) of the Act. In addition to the programs listed 

in this report under research and development or under consideration for research and 

development through contracts and partnerships, private products are submitted to the 

Corporation under section 508(h) of the Act. Details on these "508(h)" products are subject to 

the confidentiality provisions of the Act. 

Following is an update on the status of projects conducted through contracts and partnerships 

since ARPA was enacted. This update is based on information available in October 2002; the 

status of many projects will change considerably by the time the report is printed and released. 

Update on Projects Initiated During FY 2001 

Contracting and Partnership Vehicles: Various contracting and partnership vehicles were used to 

initiate approximately 30 new research and development projects during FY 2001. 

Base Research and Development (R&D) Contract. Ten of the FY 2001 projects were initiated as 

task orders (TOs) under a base research and development contract awarded competitively to the 

following four contractors: 

· AgriLogic, Inc., College Station, TX 

· IGF Holdings, Inc., Des Moines, IA (contract is now with American Agrisurance) 

6 
· National Crop Insurance Services, Inc., Overland Park, KS 

· Watts & Associates, Inc., Billings, MT 

TOs describe RMA's work requirements for the research, development, implementation, and 

evaluation of new risk management programs. 

Current status of FY 2001 projects awarded through the Base R&D Contract Pool. Following is 

a listing and status of the 10 research and development projects funded during FY 2001 that were 

awarded to contractors in the Base R&D Contract Pool. 

C Cotton Boll Weevil Eradication Program Impact on Actual Production History (APH) 

Yields - Research Report (Watts and Associates) - The purpose of this project is to 

analyze changes in cotton yields where measures have been taken to reduce boll weevils. 

The project is directed at the purpose of section 508(g)(5) of the Act requiring the 

Corporation to develop a methodology for adjusting the APH of a producer when 

specified conditions apply and crop yields are increased as a result of successful pest 

control efforts. The study was completed and indicated no APH yield changes should be 

made due to the Cotton Boll Weevil Eradication Program. 

C Cut Flower Research Report (National Crop Insurance Services) - The purpose of this 

project is to research the best techniques for insuring cut flowers and cut cultivated floral 

greens. The project promotes the purpose of section 522(c)(1)(C) of the Act as amended 

by ARPA; that is, to increase participation by producers of underserved agricultural 

commodities, including specialty crops. The final research report for this project was 

accepted September 10, 2002, and RMA is evaluating options to proceed with program 

development during FY 2003. 

C Feasibility of Revenue Coverage Plans that Maximize Producer Revenue - Research 

Report (Watts and Associates) - The purpose of this project is to investigate 

opportunities for new and improved revenue coverage plans. The project promotes the 

purpose of section 522(c)(8) of the Act requiring the Corporation to contract for research 

and development regarding one or more revenue coverage plans designed to enable 

producers to take maximum advantage of fluctuations in market prices and thereby 

maximize revenue realized from the sale of an agricultural commodity. The purpose of 

this task order is to conduct a feasibility study that will provide information for subsequent 

program development activity. The decision memorandum for proceeding with program 

development was approved and a task order for program development is expected to be 

awarded early in FY 2003. 

C Fresh Vegetables - Research Report (AgriLogic, Inc.) - The purpose of this project is to 

research the potential to develop a risk management strategy to provide coverage for 

asparagus, broccoli, carrots, cauliflower, celery, garlic, globe artichoke, lettuce-head, 

lettuce-leaf, lettuce-romaine, and spinach. The project promotes the purpose of section 

522(c)(1)(C) of the Act as amended by ARPA; that is, to increase participation by 

producers of underserved agricultural commodities, including specialty crops. The 

research report is completed and RMA is deciding whether to proceed with a program 

development project that could be awarded early in FY 2003. 

7 
C Hawaii Tropical Fruits and Trees - Research Report (AgriLogic, Inc.) - The purpose of 

this project is to research the best approaches to provide risk management strategies for 

the following crops defined under Hawaii Tropical Fruits and Trees: Bananas, Coffee, 

Guavas, Papaya, Pineapples, Mango, Lychee, Rambutan, and Atemoya (Moya). The 

project promotes the purpose of section 522(c)(1)(C) of the Act as amended by ARPA; 

that is, to increase participation by producers of underserved agricultural commodities, 

including specialty crops. The feasibility study is completed and a program development 

project was awarded September 26, 2002. 

C Multiple Year Coverage - Research Report (Watts and Associates) - The purpose of this 

project is to determine if a multi-year policy would reduce fraud, waste, and abuse of crop 

insurance in certain geographic areas. The project promotes the purpose of section 

522(c)(7) of the Act requiring the Corporation to contract with a qualified person to 

determine whether offering policies that provide coverage for multiple years would reduce 

fraud, waste, and abuse by participants in the Federal crop insurance program. The 

feasibility study is completed and RMA expects to award a project for program 

development early in FY 2003. 

C Pasture and Rangeland Program - Research Report (AgriLogic, Inc.) - The purpose of 

this project is to investigate possibilities for risk management programs for pastures or 

rangeland for forage. The project promotes the purpose of section 522(c)(6) of the Act 

requiring the Corporation to establish as one of the highest research and development 

priorities of the Corporation the development of a pasture, range, and forage program. A 

decision memo was approved for proceeding with a program development project to be 

awarded early in FY 2003. 

C Perennial Pathogen Research Report (AgriLogic, Inc.) - The purpose of this project is to 

research the potential to develop a risk management strategy for tree, vine, and bush crop 

growers that are subject to perennial crop pathogens. The project promotes the purpose 

of section 522(c)(1)(C) of the Act as amended by ARPA; that is, to increase participation 

by producers of underserved agricultural commodities, including specialty crops. The 

research for this project is virtually completed and, depending upon RMA 

recommendations, a program development project could be awarded early in FY 2003. 

C Quarantine Research and Program Design Report (AgriLogic, Inc.) - The purpose of 

this project is to research the potential to develop a risk management tool for producers of 

crops subject to quarantine regulations. The project promotes the purpose of section 

522(c)(1)(C) of the Act as amended by ARPA; that is, to increase participation by 

producers of underserved agricultural commodities, including specialty crops. Any 

quarantine risk management program will address underserved specialty crops that are 

neither currently insurable under the Federal crop insurance program nor generally 

insurable in the private sector, and will expand coverage for some crops, including 

specialty crops, currently insured but unprotected from quarantine risk. Work is 

continuing on this project and, depending upon RMA recommendation, a program 

development project could be awarded in FY 2003. 

8 
C Research and Development of a Cost of Production (COP) Insurance Program for 

Soybeans, Corn, Cotton, Wheat, Rice, Almonds, Peaches, Cranberries, Apricots, 

Nectarines, Onions, and Sugarcane (AgriLogic, Inc.) - The purpose of this project is to 

research and deliver components of cost-of-production based revenue insurance programs 

for the 12 specified crops in select areas. The project promotes the purpose of section 

522(c)(9) of the Act requiring the Corporation to enter into a contract for research and 

development regarding a cost-of-production policy. On October 22, 2002, the FCIC 

Board of Directors tabled a docket that would have authorized implementation of a 

Cotton Cost of Production Pilot Crop-Revenue plan of insurance pending resolution of 

issues raised by expert reviewers, Risk Management Agency, Office of the General 

Counsel, and the Board. Additional work remains to be completed before a program will 

be available to producers. 

Current status of FY 2001 projects awarded through other vehicles. 

Following is a listing and status of research and development projects funded during FY 2001 that 

were awarded through contract or partnership vehicles other than the Base R&D Contract Pool. 

C Assess the Demand for Specific Weather Peril Insurance (University of Georgia) - The 

purpose of this project is to research the feasibility to develop a general class of insurance 

products to protect against specific weather risks such as high or low precipitation or 

temperature. The project promotes the purpose of section 522(d)(1) of the Act as 

amended by ARPA; that is, to increase the availability of loss mitigation, financial, and 

other risk management tools for producers of agricultural commodities covered by section 

196 of the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, and 

underserved agricultural commodities. Work is continuing on this project. 

C Avocado Pilot Rating Evaluation and Analysis (GovWorks/Signal) - The purpose of this 

project is to evaluate a pilot crop insurance program as required under section 

523(a)(5)(A) and (B) of the Act as amended by ARPA. The evaluation process is one of 

the key steps in the research and development process for a specialty crop pilot program 

consistent with section 522 (c)(1) and 523(a)(1) of the Act. Completion of this project is 

scheduled for January 31, 2003, at which time RMA will proceed with a determination on 

the disposition of the pilot program for the future. 

C California Crop Insurance Utilization (University of California) - The purpose of this 

project is to identify the potential market for specialty crop insurance and provide the data 

necessary to evaluate options for new or modified insurance programs to meet the needs 

of specialty crop producers. The project promotes the purpose of section 522(d)(1) of the 

Act as amended by ARPA; that is, to increase the availability of loss mitigation, financial, 

and other risk management tools for producers of agricultural commodities covered by 

section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, 

and underserved agricultural commodities. Through this partnership with researchers at 

the University of California, Davis, specialty crops producers were contacted to determine 

how crop insurance programs could be designed to better meet their needs. The results of 

the survey are being analyzed and are expected in the second quarter of FY 2003. 

C Evaluate the Use of Satellite and Aircraft Remote Sensing for Crop Loss Adjustment 

9 
(Agricultural Research Service National Soil Tilth Laboratory) - The purpose of this 

project is to adopt the various remote sensing measures of yield to field-scale evaluations 

of crop yield and yield loss for the purposes of insurance adjustment. The project 

promotes the purposes of sections 522(d)(1), (2), and (3)(G) of the Act as amended by 

ARPA; that is, to increase the availability of loss mitigation, financial, and other risk 

management tools for producers, and to further increase economic and production 

stability. RMA expects a risk management tool to be developed to assist producers in 

receiving the most accurate loss adjustment possible to ensure that producers get all the 

benefits to which they are entitled. Work continues on this project. 

C Florida Specialty Crops Survey (University of Florida) - The purpose of this project is to 

identify the potential market for specialty crop insurance and provide the data necessary to 

evaluate options for new or modified insurance programs to meet the needs of specialty 

crop producers. The project promotes the purpose of section 522(d)(1) of the Act as 

amended by ARPA; that is, to increase the availability of loss mitigation, financial, and 

other risk management tools for producers of agricultural commodities covered by section 

196 of the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, and 

underserved agricultural commodities. Through this partnership with researchers at the 

University of Florida, specialty crops producers were contacted to determine how crop 

insurance programs could be designed to better meet their needs. The results of the 

survey are being analyzed and are expected in the second quarter of FY 2003. 

C Forecasting the Occurrence of Potato Late Blight (University of Idaho) - The purpose of 

this project is to develop a Potato Late Blight forecasting model for potatoes. The project 

promotes the purpose of section 522(d)(1) of the Act as amended by ARPA; that is, to 

increase the availability of loss mitigation, financial, and other risk management tools for 

producers of agricultural commodities covered by section 196 of the Agricultural Market 

Transition Act (7 U.S.C. 7333), specialty crops, and underserved agricultural 

commodities. Weather stations were calibrated in March and April 2002, and were 

deployed in nine commercial potato fields and one research plot location. Research plots 

were established at Bonners Ferry and Aberdeen, Idaho, and researchers are in the process 

of creating the predictive model, performing fungicide tests, and scouting fields. 

C Income Protection Rating and Pricing Evaluation (GovWorks/Signal) - The purpose of 

this project is to evaluate a pilot crop insurance program as required under section 

523(a)(5)(A) and (B) of the Act as amended by ARPA. The evaluation process is one of 

the key steps in the research and development process for a pilot program consistent with 

section 523(a)(1) of the Act. Evaluation of the pilot and reporting on the 

recommendations are nearing completion. 

C Investigation of Producers' Management of Storage Problems for Onions (University of 

Idaho) - The purpose of this project is to research how producers can minimize losses to 

stored onions. The project promotes the purpose of section 522(d)(1) of the Act as 

amended by ARPA; that is, to increase the availability of loss mitigation, financial, and 

other risk management tools for producers of agricultural commodities covered by section 

196 of the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, and 

underserved agricultural commodities. Work is continuing on this project scheduled to be 

10 
completed in May 2005. 

C National Risk Management Feasibility Program for Aquaculture (Mississippi State 

University) - The purpose of this project is to conduct a large-scale and thorough 

investigation into the feasibility to develop and implement risk management programs for 

producers of selected aquaculture species (catfish, salmon, trout, and baitfish) in the 

United States, and to provide FCIC risk management products, policies, and related 

materials necessary to implement these programs. The project promotes the purpose of 

section 522(d)(1) of the Act as amended by ARPA; that is, to increase the availability of 

loss mitigation, financial, and other risk management tools for producers of agricultural 

commodities covered by section 196 of the Agricultural Market Transition Act (7 U.S.C. 

7333), specialty crops, and underserved agricultural commodities. The partnership has 

conducted the first National Technical Exchange meeting. This meeting brought together 

a broad base of aquaculture experts, researchers, and State and National Association 

members from across the United States. Teams were organized to begin research into the 

four species identified in the partnership. Upcoming activities include listening sessions 

with producers and development of preliminary reports. 

C New York Specialty Crops Survey (Cornell University) - The purpose of this project is to 

identify the potential market for specialty crop insurance and provide the data necessary to 

evaluate options for new or modified insurance programs to meet the needs of specialty 

crop producers. The project promotes the purpose of section 522(d)(1) of the Act as 

amended by ARPA; that is, to increase the availability of loss mitigation, financial, and 

other risk management tools for producers of agricultural commodities covered by section 

196 of the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, and 

underserved agricultural commodities. Through this partnership with researchers at 

Cornell University, specialty crops producers were contacted to determine how crop 

insurance programs could be designed to better meet their needs. The results of the 

survey are being analyzed and are expected in the second quarter of FY 2003. 

C Nursery Program Plant List Research, Updating, and Revisions (DataScape, LLC) - The 

purpose of these projects was to update and expand the nursery-eligible plant list for the 

2003 crop year, to review and revise winter storage requirements as needed, to address 

other nursery issues, and to update and enhance the nursery program software operating 

system. Work was completed on these projects. RMA updated the nursery program 

beginning the 2003 crop year, including updating the software from a 16-bit to a 32-bit 

application to improve efficiency. 

C Organics Study (USDA, Economic Research Service) - The purpose of this project is to 

study and provide recommendations on yields, risks, and related issues regarding crops 

grown for organic purposes. Work continues on this project. 

C Pecan Pilot Evaluation Feedback and Issues Report (GovWorks/Signal/North Carolina 

A&T) - The purpose of this project is to evaluate a pilot crop insurance program as 

required under section 523(a)(5)(A) and (B) of the Act as amended by ARPA. The 

evaluation process is one of the key steps in the research and development process for a 

specialty crop pilot program consistent with section 522 (c)(1) and 523(a)(1) of the Act. 

11 
Both the project and the final evaluation of this pilot program are complete. On 

September 19, 2002, the FCIC Board of Directors approved expansion into 79 additional 

counties in Georgia for the 2003 crop year and conversion of the pilot program to 

permanent status as soon as the regulatory process to convert the pilot program is 

complete (expected to be effective beginning the 2004 crop year). 

C Pennsylvania Specialty Crops Survey (Pennsylvania State University) - The purpose of 

this project is to identify the potential market for specialty crop insurance and provide the 

data necessary to evaluate options for new or modified insurance programs to meet the 

needs of specialty crop producers. The project promotes the purpose of section 522(d)(1) 

of the Act as amended by ARPA; that is, to increase the availability of loss mitigation, 

financial, and other risk management tools for producers of agricultural commodities 

covered by section 196 of the Agricultural Market Transition Act (7 U.S.C. 7333), 

specialty crops, and underserved agricultural commodities. Through this partnership with 

researchers at Penn State University, specialty crops producers were contacted to 

determine how crop insurance programs could be designed to better meet their needs. 

Results of the survey are being analyzed and are expected the second quarter of FY 2003. 

C Performance-based Premium Rate Discount Report (GovWorks/Sumaria) - The purpose 

of this project is to examine, develop, and evaluate the effect of good experience discounts 

on RMA program loss experience and producer participation. The project promotes the 

purpose of section 508(d)(3) of the Act; that is, to provide a performance- based premium 

discount for a producer of an agricultural commodity who has good insurance or 

production experience relative to other producers of that agricultural commodity in the 

same area. Work continues on this project. 

C Production Input Expenditures Study for Existing RMA Policies (University of California) 

- The purpose of this project is to develop a methodology for determining and updating 

production input expenditure data for certain crops, particularly specialty crops, to 

facilitate the research and development of new and modified risk management products for 

producers. The project promotes the purpose of section 522(d)(1) of the Act as amended 

by ARPA; that is, to increase the availability of loss mitigation, financial, and other risk 

management tools for producers of agricultural commodities covered by section 196 of 

the Agricultural Market Transition Act (7 U.S.C. 7333), specialty crops, and underserved 

agricultural commodities. The major use of the data will be to update crop budget 

information for current Dollar Plan crops. The study is scheduled for completion in 

August 2003. 

C Revenue Insurance for Cattle and Hog Producers (Iowa State University) - The purpose 

of this project is to research the feasibility to provide beef cattle and hog risk management 

tools and the relative desirability of these tools. The project promotes the purpose of 

section 523(b)(2) of the Act as amended by ARPA; that is, to evaluate the effectiveness of 

risk management tools for livestock producers, including the use of futures and options 

contracts and policies and plans of insurance that protect the interests of livestock 

producers and that provide livestock producers with reasonable protection from the 

financial risks of price or income fluctuations inherent in the production and marketing of 

livestock. Work continues on this project. 

12 
C Sweetpotato Pilot Evaluation Feedback and Issues Report (GovWorks/North Carolina 

A&T) - The purpose of this project is to evaluate a pilot crop insurance program as 

required under section 523(a)(5)(A) and (B) of the Act as amended by ARPA. The 

evaluation process is one of the key steps in the research and development process for a 

specialty crop pilot program consistent with section 522 (c)(1) and 523(a)(1) of the Act. 

The feedback and issues report was completed and an evaluation contract is being 

awarded through GovWorks. 

C Value Enhanced Products Research Report (USDA, Economic Research Service) - The 

purpose of this project is to address identity-preserved and other value-enhanced products 

including specialty grains, and/or to recommend actions to ensure that risk management 

programs appropriately address the needs of producers (including the possible use of 

Written Agreements to modify price elections). Work continues on this project. 

C Wild Salmon Feasibility Study (CSREES/Univ. of Alaska, Fairbanks) - The purpose of 

this project was to research the feasibility to develop a risk management strategy for wild 

sockeye salmon that addresses the economic needs of Bristol Bay fishermen. The 

feasibility study was completed, and generally indicated that developing a wild salmon 

crop insurance program for Bristol Bay is not feasible. RMA is currently evaluating the 

potential for other risk management alternatives to mitigate the risks faced in the wild 

salmon industry. 

Projects Initiated During FY 2002 

Contracting and Partnership Vehicles: Various contracting and partnership vehicles were used to 

initiate approximately 40 new research and development projects during FY 2002. As in FY 

2001, a number of projects were initiated through the Base Research and Development Contract 

pool. Other projects were initiated as partnerships or contracts through other procurement 

vehicles, one of which began as a Request for Applications (RFA) described below. 

Product Portfolio Study: The FCIC Board of Directors (Board) in their September 19, 2002 

meeting, authorized the FCIC Manager to take such action as necessary to enter into and execute 

contracts with certain expert reviewers or alternates in case the proposed persons are not 

available, to review the FCIC product portfolio. The objective of this review is to assist RMA 

and the Board in the design and implementation of a comprehensive review of the FCIC existing 

and anticipated product portfolio to help the Board ensure that: 

C Producers' needs are being adequately and appropriately addressed; 

C FCIC and insurance company involvement in the assumption of risks for such products 

meets overall program objectives, guidelines, and legal requirements; and 

C the pattern and pace of future product development are managed in a strategic framework 

that reflects public policy priorities expressed by Congress and the Secretary of 

Agriculture, producer needs, and agency and delivery system resource constraints. 

FY 2002 Partnership Agreements for Objectives in Section 522(d)(3) of the FCI Act. On July 1, 

13 
2002, RMA published in the Federal Register a Request for Applications (RFA): Research 

Partnerships for Risk Management Development and Implementation announcing the availability 

of funds for partnership agreements that will fund risk management research and development 

activities. Priority is given to those activities addressing the need for risk management tools for 

producers of Noninsured Crop Disaster Assistance Program (NAP) crops, specialty crops, and 

underserved commodities. Awards, on a competitive basis, may be for a period of up to 2 years. 

The objectives of the partnerships as defined in section 522(d)(3)(A) through (E) and (G) of the 

FCI Act are to: 

C Enhance the notice and timeliness of notice of weather conditions that could negatively 

affect crop yields, quality, and final product use in order to allow producers to take 

preventive actions to increase end product profitability and marketability and to reduce the 

possibility of crop insurance claims; 

C Develop a multifaceted approach to pest management and fertilization to decrease inputs, 

decrease environmental exposure, and increase application efficiency; 

C Develop or improve techniques for planning, breeding, planting, growing, maintaining, 

harvesting, storing, shipping, and marketing that will address quality and quantity 

challenges associated with year-to-year and regional variations; 

C Clarify labor requirements and assist producers in complying with requirements to better 

meet the physically intense and time-compressed planting, tending, and harvesting 

requirements associated with the production of specialty crops and underserved 

agricultural commodities; 

C Provide assistance to State foresters or equivalent officials for the prescribed use of 

burning on private forest land for the prevention, control, and suppression of fire; and 

C Develop other risk management tools to further increase economic and production 

stability. 

Listed below are the partners who were awarded projects under this RFA during FY 2002, 

followed by a brief description of the project. 

C AgriLogic, Inc.: 

o Develop a comprehensive set of decision support tools (InsuranceVision) designed to 

assist producers in selecting the most effective risk management strategies. 

o Develop an Internet-based burning risk advisory system using biophysical vegetation 

models, near real-time weather, and greenness indices. 

o Generate the necessary data and information to analyze and evaluate risk management 

options for the apiculture industry and, if feasible, develop a risk management 

program. 

o Generate the necessary data and information to analyze and evaluate risk management 

options for producers of triticale and, if feasible, develop a risk management program. 

C Board of Regents, University of Nebraska – Lincoln - Develop a climate and soil hazard 

information system that incorporates all components of agricultural landscapes with an 

array of climate analysis and forecast tools so producers will have the capability to analyze 

potential risks to crops and livestock. 

14 
C Georgia Organics, Inc. - Compare and contrast direct marketing strategies for organic 

producers and develop a tool that can be used to select the best strategy in production 

areas to reduce income variation. 

C Iowa Department of Natural Resources Bureau of Forestry - If feasible, prevent, control, 

and suppress wildfires through the development of an insurance product that reduces the 

liability of private contractors and non-governmental organizations when conducting 

prescribed fires on private forest land. 

C Iowa State University - Examine the use of weather station data to create yield insurance 

for underserved commodities and, if feasible, develop a risk management program. 

C North-South Institute - Establish two agricultural labor cooperatives that can serve as 

operational risk management tools for limited-resource and small family farms in selected 

areas of Mississippi and Florida. 

C Rutgers, The State University of New Jersey - Evaluate the feasibility of weather 

insurance for noninsured and specialty crops and, if feasible, develop a web-based weather 

risk management tool. 

C Science Applications International Corporation - Develop an understanding of potential 

bioterrorist threats at different points in the food chain and the implications on the farming 

sector and, if feasible, provide interim solutions such as the development of an insurance 

program. 

C Texas Tech University - Determine the feasibility of and if feasible, develop a financial 

derivative product specifically designed to protect against the uncertainty of seasonaverage prices. 

C University of Florida - Develop decision aids and tools to assess climate-related economic 

risks in peanut and tomato production systems; develop a wildfire risk forecast system; 

and develop a decision aid to reduce fertilizer use and environmental exposure in potato 

crops. 

C University of Georgia Research Foundation, Inc. - Develop a risk management system 

based on an Artificial Neural Network designed to utilize short-term weather data to 

predict frost and reduce risk for horticultural crop producers, especially fruit crops, in the 

southeastern U.S. 

C University of Idaho - Develop a web-based software tool that can be used by potato 

growers, water managers, and risk management personnel to reduce exposure to drought 

risk in potato cropping systems. 

FY 2002 Program Development Projects 

C Hawaii Tropical Fruits and Trees Pilot Program Development - This project follows 

15 
research conducted as a result of a project awarded during FY 2001. The project was 

awarded to AgriLogic in September 2002. 

C Nursery Program Plant List Research, Updating, and Revisions - The purpose of these 

projects is to update and expand the nursery eligible plant list for the 2004 crop year, to 

review and revise winter storage requirements as needed, and to address other nursery 

issues. A contract was awarded to DataScape, LLC, which is currently entering plant and 

wholesale price data into the Eligible Plant List database. 

C Silage Sorghum Pilot Program Research and Development - The purpose of this project 

is to research and develop a silage sorghum pilot program for producers who grow a dualpurpose sorghum for harvest as silage. The project was awarded to Watts and Associates, 

Inc., September 16, 2002. 

FY 2002 Feasibility Studies and Research Reports. The following projects were awarded during 

FY 2002, and are primarily conducted as feasibility studies or research reports. 

C Biomass (Feasibility Study) - The purpose of this project is to conduct a feasibility study 

of biomass issues affecting producers and crop insurance programs, and appropriate 

products to address identified needs. This project was awarded to National Crop 

Insurance Services on September 16, 2002, as a task order under the R&D Pool Contract. 

C Buckwheat Loss Appraisal Methods and LASH Modifications - The purpose of this 

project is to research and develop buckwheat loss adjustment appraisal methods and 

revisions to the Loss Adjustment Standards Handbooks for buckwheat. This project was 

awarded to American Agrisurance September 5, 2002, as a task order under the R&D 

Pool Contract. 

C Changes to the Pilot Fresh Market Snap Bean Crop Insurance Program (Internal) - The 

purpose of this project was to obtain input from fresh market snap bean producers and 

producer groups in the pilot program States to determine the need and feasibility of either 

modifying the current crop insurance program or offering an alternative fresh market bean 

crop insurance program that would increase participation. Changes that were 

implemented for the 2002 crop year include: 

o Adding stage guarantee language for loss adjustment to be consistent with other 

Dollar Plans of insurance. The stage guarantee compensates the producer for crop 

losses based on the crop’s stage of development as determined by the number of days 

after planting; 

o Adding new requirements to insurable acreage. The new requirements allow the 

insured the option to replant the damaged acreage and collect a replanting payment or 

not to replant and receive an indemnity based on the stage of growth the plant attained 

at the time of damage; 

o Removing the Spring Planting Period for Florida and modifying language to 

accommodate planting period differences among Florida, North Carolina, and Virginia; 

o Adding replanting payment provisions to allow for replanting payments in accordance 

16 
with section 13 of the Common Crop Insurance Policy Basic Provisions; and 

o Modifying the minimum value option provisions to allow for modifications to the 

minimum values in the Special Provisions of Insurance documents. 

The Miami-Dade County program in Florida makes up approximately 87 percent of 

acreage in the pilot program. Policies sold have increased by approximately 20 percent 

each year from 2000 through 2002. Net acreage insured has increased approximately 64 

percent for the 2002 crop year. 

C Direct Marketing of Perishable Crops - The purpose of this project is to conduct research 

and develop recommendations regarding the handling of direct marketing under existing 

crop insurance programs; and, if appropriate, the research and development of a pilot 

program to address the specific needs of producers who market their crops directly to the 

consumer. An FY 2002 GovWorks contract was awarded. 

C Dry Bean Appraisals - Beans per Plant by Variety - The purpose of this project is to 

study possibilities for improving dry bean appraisals for use in the crop insurance program.

 A contract is being awarded through GovWorks for FY 2002. 

C Expanding Crop Insurance Coverage to Include Federal Agency Actions - The purpose 

of this project is to study the feasibility of expanding eligibility for crop insurance under 

the FCI Act and noninsured crop assistance under the FAIR Act to agricultural producers 

experiencing disaster conditions caused primarily by Federal agency action restricting 

access to irrigation water, including any lack of access to an adequate supply of water 

caused by failure of the Secretary of the Interior to fulfill a contract in accordance with the 

Central Valley Project Improvement Act. RMA entered into an agreement with the 

Economic Research Service (ERS), USDA, on August 14, 2002, to conduct this study. 

C Lawn Seed Pilot Program - Feasibility Study - The purpose of this project is to conduct 

research and provide RMA a research report on the feasibility of a pilot program to 

provide lawn seed producers a risk management tool to address their needs. A contract is 

being awarded through GovWorks for FY 2002. 

C Livestock Disease Risk Management Tools - Research Report - The purpose of this 

project is to conduct research and provide RMA a research report providing basic 

supporting information to facilitate developing disease risk management tools for livestock 

and poultry producers. An Economy Act Agreement was awarded to the Animal and 

Plant Health Inspection Service (APHIS), USDA, and work is continuing on this project. 

C Livestock Risk Management Tools - Feasibility Study - The purpose of this project is to 

study the feasibility of developing risk management tools for livestock producers (poultry 

[chicken broilers and layers], dairy, sheep, and lambs.) This task order was awarded to 

Watts and Associates in September 2002. 

C Risk Management Stabilization Accounts - Feasibility Study - The purpose of this project 

is to conduct research and provide RMA a research report on the feasibility of a program 

to provide producers risk management stabilization accounts to enable them to manage or 

17 
mitigate production or income losses, with priority consideration for producers growing 

agricultural commodities for which no Federal crop insurance program is available. This 

project was awarded to the Economic Research Service (ERS), USDA late in FY 2002. 

ERS representatives met with RMA representatives on September 20, 2002, to discuss 

issues and approaches for this research. 

C Tree, Vine, and Bush Replacement Program - Feasibility Study - The purpose of this 

project is to conduct research and provide RMA a research report on the potential 

research and development of a tree, vine, and bush replacement program as an option for 

growers of grapes, citrus, tree fruit, nut, kiwi, blueberries, and other high-value, 

permanent crops. This task order was awarded to AgriLogic on September 26, 2002. 

FY 2002 Pilot Program Evaluation Projects. 

C Program Evaluations for the following Pilot Crop Insurance Programs: 

The purpose of these projects is to conduct evaluations or evaluation reports from the 

previous year's evaluation, on pilot crop insurance programs. RMA will then use this 

information and the recommendations to determine whether to modify the programs, 

convert the programs to permanent program status, or take other actions determined 

appropriate based on the results of each evaluation and subsequent report. 

o Avocado APH Evaluation - This internal evaluation is expected to be completed 

early in FY 2003. 

o Cherry Evaluation - A contract was forwarded to GovWorks in August 2002, 

with award to be made for FY 2002. 

o Crambe Evaluation - Completion of this internal evaluation is expected early in 

FY 2003. 

o Florida Fruit Tree (and Avocado/Mango Tree) Pilot Research and Modifications 

- This task order was awarded to AgriLogic in September 2002. 

o Mustard Evaluation (Internal) - Completion of this internal evaluation is expected 

early in FY 2003. 

o Pecans (Evaluation report from previous year's evaluation) - This internal 

evaluation is complete. On September 19, 2002, the FCIC Board of Directors 

approved expansion into 79 additional counties in Georgia for the 2003 crop year 

and conversion of the pilot program to permanent status as soon as the regulatory 

process to covert the pilot program is complete (expected to be effective beginning 

the 2004 crop year). 

o Rangeland GRP Evaluation - This project was awarded to Watts and Associates, 

Inc. on September 23, 2002, as a task order under the R&D Pool Contract. 

o Squash and Pumpkin Evaluation - A contract is being awarded through 

GovWorks for FY 2002. 

o Sweetpotato (Evaluation report from previous year's evaluation) - A contract was 

forwarded to GovWorks September 19, 2002, and is being awarded for FY 2002. 

o Wild Rice Evaluation - A contract is being awarded through GovWorks for FY 

2002. 

18 
 

FY 2002 Permanent Program Evaluation Projects. 

C Quality Review of Dry Bean and Sugar Beet Crop Insurance Policies - The purpose of 

this task order is to review the existing dry bean and sugar beet crop insurance policies to 

identify potential vulnerabilities and weaknesses to help limit exposure to fraud, waste and 

abuse. A contract was forwarded to GovWorks for award in FY 2002. 

C Quality Review of Specialty Crop Policies - The purpose of this task order is to review 

the existing almond, apple, fig, and pear crop insurance policies to identify potential 

vulnerabilities and weaknesses to help limit exposure to fraud, waste and abuse. A 

contract was forwarded to GovWorks for award in FY 2002. 

New Pilot Programs Introduced Beginning the 2002 Crop Year 

Effective beginning the 2002 crop year, RMA implemented a Pilot Raspberry/Blackberry Crop 

Insurance program and a Pilot Forage Seed (Alfalfa) Crop Insurance program. The following 

program participation information was taken from RMA's weekly Summary of Business report, as 

of September 30, 2002. Current information on the participation by producers in these and other 

programs can be obtained from the RMA web site under Participation Data, as indicated in the 

Public Awareness and Input of Producers and Organizations section at the end of this report. 

The Pilot Raspberry/Blackberry Crop Insurance program was initiated in the following seven 

counties in California, Oregon, and Washington: 

· California - Monterey and Santa Cruz Counties; 

· Oregon - Clackamas, Marion, and Multnomah Counties; 

· Washington - Clark and Cowlitz Counties. 

Pilot Raspberry/Blackberry Crop Insurance program participation (2002 crop year): 

Policies Units Net 

Policies Earning Earning Acres Loss 

Sold Premium Premium Insured Liability Premium Ratio 

27 25 27 1,710 $1,094,225 $75,940 0.00 

The Pilot Forage Seed (Alfalfa) Crop Insurance program was initiated in the following 10 

counties in California, Idaho, Montana, Nevada, Oregon, Washington, and Wyoming: 

· California - Kings County; 

· Idaho - Owyhee County; 

· Montana - Big Horn County; 

· Nevada - Humboldt and Pershing Counties; 

19 
 

· Oregon - Malheur County; 

· Washington - Grant and Walla Walla Counties; 

· Wyoming - Big Horn and Park Counties. 

Pilot Forage Seed (Alfalfa) Crop Insurance program participation (2002 crop year): 

Policies Units Net 

Policies Earning Earning Acres Loss 

Sold Premium Premium Insured Liability Premium Ratio 

106 62 172 10,394 $5,174,196 $385,589 0.00 

Conversion and Expansion of the Pilot Millet Crop Insurance Program 

Effective beginning the 2003 crop year, the Pilot Millet Crop Insurance Program is being 

converted to permanent program status and expanded from 5 counties to 55 counties in Colorado, 

Nebraska, North Dakota, and South Dakota. 

The five original counties for the pilot program were Logan County, Colorado; Cheyenne and 

Deuel Counties, Nebraska; Dickey County, North Dakota; and Bennett County, South Dakota. 

The 50 expansion counties for millet are: 

Colorado: Adams, Arapahoe, Cheyenne, Denver, Elbert, Kiowa, Kit Carson, Lincoln, Morgan, 

Phillips, Sedgwick, Washington, Weld, and Yuma Counties; 

Nebraska: Banner, Box Butte, Chase, Dawes, Garden, Keith, Kimball, Morrill, Perkins, Scotts 

Bluff, and Sheridan Counties; 

North Dakota: Sargent County; and 

South Dakota: Beadle, Corson, Day, Dewey, Faulk, Gregory, Haakon, Hand, Hughes, Hyde, 

Jackson, Jones, Lyman, Meade, Mellette, Pennington, Perkins, Shannon, Spink, Stanley, Sully, 

Todd, Tripp, and Ziebach Counties. 

With conversion of the pilot program to permanent program status, producers in the above 55 

counties will be able to insure their millet crop under the Millet Crop Insurance Program through 

the actuarial documents being made available for their county, provided the producers meet the 

policy eligibility requirements. Producers in counties other than the 55 insurable counties will 

now be able to insure their crop through a written agreement as a result of the permanent program 

status, provided the policy eligibility requirements are met. Producers are encouraged to contact 

their crop insurance agent for appropriate details. 

RMA’s Administrator provided a report on the operation of this pilot program to the 

Congressional Committee on Agriculture of the House of Representatives and the Committee on 

Agriculture, Nutrition, and Forestry of the Senate in July 2000. In that report, the RMA 

20 
Administrator indicated RMA's plan to expand the crop insurance program to include millet as a 

permanent insurance program. The evaluation, report, and recommendation with respect to 

implementing pilot programs on a national basis (essentially converting pilot programs to 

permanent programs and considering expansion into additional areas at that time) is required in 

section 523(a)(5) of the Act. 

Continuation and Conversion of the Pilot Blueberry Insurance Program 

On February 7, 2002, the FCIC Board of Directors voted to continue the Pilot Blueberry Crop 

Insurance program through the 2003 crop year and to convert the program to permanent status 

effective beginning the 2004 crop year. When the pilot program is converted to permanent status 

producers in counties without a program in place will be able to insure their crop through a 

written agreement, provided the policy eligibility requirements are met. 

Expansion and Conversion of the Pecan Revenue Pilot Program 

A Pecan Revenue Pilot program has been available in Dougherty, Lee, and Mitchell Counties, 

Georgia since 1998, with 102 policies in force and over $7.9 million in liability in 2001. The 

program was evaluated during FY 2001 and 2002. On September 19, 2002, RMA provided a 

copy of the pilot program evaluation to the FCIC Board of Directors at their meeting in Kansas 

City, MO. In that meeting the Board approved conversion of the pilot program to permanent 

status for the 2004 crop year. Based on that decision, the Board then approved expansion of the 

pilot program into 79 additional counties in Georgia for the 2003 crop year. When the pilot 

program is converted to permanent status, producers in counties without a program in place will 

be able to insure their crop through a written agreement, provided the policy eligibility 

requirements are met. 

The expansion counties for pecans in Georgia are Appling, Atkinson, Bacon, Baker, Baldwin, Ben 

Hill, Berrien, Bibb, Bleckley, Brantly, Brooks, Bulloch, Burke, Calhoun, Camden, Candler, 

Clinch, Coffee, Colquitt, Cook, Crawford, Crisp, Decatur, Dodge, Dooly, Early, Emanuel, Evans, 

Grady, Hancock, Houston, Irwin, Jasper, Jeff Davis, Jefferson, Jenkins, Johnson, Lamar, Lanier, 

Laurens, Lowndes, McDuffie, Macon, Marion, Meriwether, Miller, Montgomery, Peach, Pierce, 

Pike, Pulaski, Putnam, Randolph, Richmond, Schley, Screven, Seminole, Spalding, Stewart, 

Sumter, Talbot, Tattnall, Taylor, Telfair, Terrell, Thomas, Tift, Toombs, Truetlen, Turner, 

Twiggs, Upson, Ware, Washington, Wayne, Webster, Wheeler, Wilcox, and Worth counties. 

Projects to be Initiated During FY 2003 

FY 2003 Program Development Projects. RMA expects to initiate the following projects during 

FY 2003 as program development projects. The project titles and descriptions may change as the 

projects are developed. Additional details on these projects are available in a previous section 

identifying the feasibility studies for the FY referred to by project. 

Pasture and Rangeland - The purpose of this project is to develop risk management tools 

to meet the needs of producers and ranchers. This project follows research conducted as a 

result of a project awarded during FY 2001. RMA is proceeding with a program 

development project to be awarded early in FY 2003. The pasture and rangeland program 

C 

21 
being studied is expected to ultimately be widely available in all regions and to more 

adequately serve the needs of producers by its capability of being tailored to reflect the 

conditions and needs in local areas. The study indicates that a program using a computer 

model to compute plant growth is feasible and development will be started. This will not 

require ranchers to provide extensive records nor involve individual (on-farm) loss 

adjustment. Payments would be based off the results of the model from the inputs into the 

model. 

C Evaluating Possible Changes to the Pilot Cultivated Clam Program - The purpose of this 

internal project is to determine appropriate changes to the Pilot Cultivated Clam Program 

to meet producers' needs. Changes that are under consideration include: 

o Development of a Peak Inventory Endorsement to allow producers to more accurately 

insure their potential crop; 

o Development of a Replant Endorsement to provide coverage for nursery clams in 

Florida; 

o Offering proration of premium in conjunction with peak inventory changes through an 

insurance option; and 

o Changes and additions to policy definitions and insurability requirements. 

C Livestock Disease - The purpose of this project is to develop risk management tools for 

livestock and poultry producers. This project follows research conducted as a result of a 

project awarded during FY 2002. 

C Multiple Year Coverage - The purpose of this project is to develop risk management tools 

to reduce fraud, waste, and abuse of the crop insurance program. This project follows 

research conducted as a result of a project awarded during FY 2001. 

C Nursery Program Plant List Research, Updating, and Revisions - The purpose of these 

projects is to update and expand the nursery-eligible plant list for the 2005 crop year, to 

review and revise winter storage requirements as needed, and to address other nursery 

issues. 

C Perennial Pathogen Destruction - The purpose of this project is to develop risk 

management tools to meet the needs of producers of perennial crops (crops grown on 

trees, vines, and bushes) whose crops are impacted by pathogens. This project follows 

research conducted as a result of a project awarded during FY 2001. 

C Quarantine Crop Insurance - The purpose of this project is to develop risk management 

tools to meet the needs of producers whose crops are impacted by quarantines. This 

project follows research conducted as a result of a project awarded during FY 2001. 

C Revenue Coverage - The purpose of this project is to develop revenue-based risk 

management tools to meet the needs of producers. This project follows research 

conducted as a result of a project awarded during FY 2001. 

22 
C Value-Enhanced Products - The purpose of this project is to develop risk management 

tools to address identity-preserved and other value-enhanced products including specialty 

grains, and/or to implement actions to ensure that risk management programs 

appropriately address the needs of producers. This project follows research conducted as 

a result of a project awarded during FY 2001. 

C Vegetables - The purpose of this project is to develop risk management tools to meet the 

needs of producers of fresh vegetables. This project follows research conducted as a 

result of a project awarded during FY 2001. 

FY 2003 Feasibility Studies and other Research and Development Projects. The following 

projects are expected to be initiated during FY 2003, and may be conducted as feasibility studies 

or research reports, and may ultimately result in the development of a risk management tool for 

producers. The scope, title, and description of these projects may change during the project 

development, award, and implementation process. 

C Christmas Tree Pilot Program (Feasibility Study) - The purpose of this project is to 

conduct research and provide RMA a research report on the feasibility of a pilot program 

to provide Christmas tree producers a risk management tool to address their needs. 

Proposals for this project were received from the R&D Contract Pool and the task order is 

to be awarded early in FY 2003. 

C Melon Pilot Program (Feasibility Study) - The purpose of this project is to conduct 

research and provide RMA a research report on the feasibility of the research and 

development of a pilot program to provide melon producers a risk management tool to 

address their needs, with consideration given to experience gained and comments received 

on the suspended watermelon pilot program. A contract has been developed and is in the 

process of being awarded. 

C Program Development Methodology for Small-Value Crops - The purpose of this project 

is to conduct research and develop a methodology for developing risk management tools 

economically and efficiently to address the specific needs of producers who grow smallvalue crops for which developmental costs are generally considered high in relation to the 

expected value of the crops (including the use of rates for one crop to rate another crop). 

C Research Report Sesame, Hybrid Sunflower Seed, Emmer and Spelt Crop Insurance 

Programs (Feasibility Study) - The purpose of this project is to conduct research and 

provide RMA a research report on the feasibility of a pilot program to provide sesame, 

hybrid sunflower seed, emmer, and spelt producers a risk management tool to address 

their needs. 

C Risk Management Crop Storage Options (Feasibility Study) - The purpose of this project 

is to determine the need and direction of research and potential development of an 

insurance product that provides protection for producer-owned apple, onion, sugar beet, 

and sweetpotato crops during storage. This project was initiated in response to section 

10001 of the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) that 

authorized insurance coverage for sweetpotatoes beyond the time the insured crop is in 

23 
the field. 

C Vegetable and Flower Seed Pilot Program (Feasibility Study) - The purpose of this 

project is to conduct research and provide RMA a research report on the feasibility of a 

pilot program to provide vegetable and flower seed producers a risk management tool to 

address their needs. 

FY 2003 Program Evaluation Projects. 

C Evaluation of Pilot Crop Insurance Programs. The purpose of these projects is to 

conduct evaluations, or evaluation reports from the previous year's evaluation, on pilot 

crop insurance programs. RMA will then use this information and the recommendations 

to determine whether to modify the programs, convert the programs to permanent 

program status, or take other actions determined appropriate based on the results of each 

evaluation and subsequent report. 

o Avocado Revenue 

o Cabbage 

o Coverage Enhancement Option 

o Income Protection (Evaluation report from previous year's evaluation) 

o Mint 

o Onion Pilot Stage Removal Option 

o Processing Chile Pepper 

o Processing Cucumber 

o Strawberry 

FY 2003 Partnership Agreements for Objectives in Section 522(d)(3) of the FCI Act. The 

purpose of these projects is to carry out the objectives stated in Section 522(d)(3)(A) through (E) 

and (G) of the FCI Act as described earlier in the section Projects Initiated During FY 2002. 

Since this process is initiated by a Request for Applications, it is unknown what specific projects 

may be pursued. However, it is envisioned these projects will be consistent with the Product 

Portfolio Study initiated in FY 2002. 

24 
 

PROGRAM EXPANSION PLANS BEYOND FY 2003 

Introduction 

Program expansion consists of two distinct processes: (a) expanding existing (permanent or pilot) 

crop policies into new areas and (b) developing new crop programs or risk management 

strategies. 

For the 2003 crop year, crop insurance is offered on 88 different agricultural commodities, as 

shown in the Appendix 1. This represents more than 350 commodity types in RMA's database. 

The crops for which insurance is offered for the 2003 crop year represent approximately 88 

percent of the commercial value of all crops grown in the United States (scoring a crop at 100 

percent of the nationwide value for that crop if a program is available, regardless of the extent of 

its availability). 

During the 2002 crop year, crop programs were offered for 38,454 county/crop combinations, 

plus approximately 3,000 county/crop programs for nursery insurance. 

RMA is aggressively continuing its efforts toward new program research and expansion. Specific 

projects currently at the forefront of the schedule for new program development are listed below. 

Some projects depend on the studies or other work conducted during a previous fiscal year. There 

is no guarantee that the projects will be awarded, when they will be initiated, or that the 

contractor or partner who worked on the related project a previous fiscal year will be awarded the 

project. It is anticipated that a number of pilot programs under research and development during 

FY 2004 and 2005 will be implemented by RMA and its private sector partners as risk 

management programs for producers effective beginning the 2006 through 2009 crop years, 

pending feasibility studies, development activities, and related issues. While it is difficult to 

predict the specific crop year and locations for which a project or program may be initiated, RMA 

updates a number of reports, including this report, to identify the status of program development 

as the process moves forward. 

Program Research and Development Plans for FY 2004 

Feasibility studies are tentatively planned to begin during FY 2004 for the following programs: 

C 

C 

C 

Bulbs, Corms, Tubers, and Rhizomes 

Cost of Production Programs for Additional Crops (depending upon the success of 

previous efforts) 

Fresh Cucumbers 

1

Crops can be counted in a number of different ways. The number reported here is based 

on an aggregated method for some crops such as grapes (with all varieties counted as one crop, 

except that the wine grape (grape) and table grape programs are counted separately). Likewise, 

nursery includes virtually thousands of insurable plant species, but is counted as one crop. 

However, types of citrus (for example, oranges, grapefruit, lemons) and stonefruit (that is, 

apricots, nectarines, and peaches) are each counted as a crop. 

25 
C Greenhouse Vegetables 

C Hazelnuts 

C Herbs 

C Olives 

C Processing Carrots 

C Radishes 

Program development projects are tentatively planned to begin during FY 2004 for the following 

programs: 

C Acts of Terrorism 

C Apiculture (Bees and Honey) 

C Biomass 

C Crop Storage Options 

C Direct Marketing of Perishable Agricultural Commodities 

C Expanding Crop Insurance Coverage to Include Federal Agency Actions 

C Lawn Seed 

C Livestock Risk Management Tools 

C Melons 

C Organics 

C Risk Management Stabilization Accounts 

C Sesame, Hybrid Sunflower Seed, Spelt, Emmer, and Minor Grains 

C Tree, Vine, and Bush Replacement Program 

C Triticale 

C Vegetable and Flower Seed 

Program Evaluation Plans for FY 2004 

RMA plans to conduct pilot program evaluations during FY 2004 for the following pilot 

programs: 

C Adjusted Gross Revenue (AGR) 

C Apple Quality Option 

C Citrus Dollar (Navel Oranges) 

C Cultivated Clams (possibly FY 2005, due to program changes being considered) 

C Fresh Market Beans (possibly FY 2005, due to program changes implemented for the 

2002 crop year) 

Program Research and Development Plans for FY 2005 

Feasibility studies are tentatively planned to begin during FY 2005 for the following programs: 

C Brussels Sprouts 

C Eggplant 

C Pod Peas 

C Processing Broccoli 

Program development projects are tentatively planned to begin during FY 2005 for the following 

26 
programs: 

C Chicory and Kiwifruit 

C Cost of Production Programs for Additional Crops (depending upon the success of 

previous efforts) 

C Fresh Cucumbers 

C Greenhouse Vegetables 

C Processing Carrots 

C Radishes 

C Specific Weather Peril Insurance 

Program Evaluation Plans for FY 2005 

RMA plans to conduct a pilot program evaluation during FY 2005 for the Raspberry/Blackberry 

Pilot Crop Insurance Program. Additional program evaluations are possible as a result of the 

Product Portfolio Study initiated during FY 2002 or as a result of other activities or requests. 

27 
 

THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002 

Introduction and Background 

The Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) was enacted in May 2002 

and included provisions specific to crop insurance and risk management programs for specialty 

crop producers. Following are details on major provisions most directly related to the Federal 

Crop Insurance program and the Risk Management Agency. 

Risk Management Provisions Impacting Specialty Crop Producers 

Equal Crop Insurance Treatment of Potatoes and Sweetpotatoes. (Section 10001) - This section 

authorizes crop insurance coverage for sweetpotatoes to continue beyond the time the insured 

crop is in the field (essentially authorizing insurance of the crop while in storage). RMA is 

contracting for a study to determine the need and direction of research and potential development 

of an insurance product that provides protection for producer-owned apple, onion, sugar beet, 

and sweetpotato crops during storage. The feasibility study is to be awarded early in FY 2003. 

Adjusted Gross Revenue Insurance Pilot Program Expansion. (Section 10004) - The Adjusted 

Gross Revenue (AGR) program is being expanded to eight counties each in California and 

Pennsylvania for the 2003 and following insurance years. California counties included in the 

expansion are Fresno, Kern, Riverside, San Diego, San Joaquin, San Luis Obispo, Tulare, and 

Ventura. Pennsylvania counties included in the expansion are Crawford, Columbia, Erie, Fayette, 

Lancaster, Schuylkill, Westmoreland, and York. The AGR pilot program, which was significantly 

changed in 2001, will now be available in 18 States and 230 counties. AGR protects the revenue 

derived from the sale of various agricultural commodities under one policy, and includes crops for 

which a Federal crop insurance program is not otherwise available. 

Sense of Congress on Expansion of Crop Insurance Coverage. (Section 10005) - This provision 

states Congress' intent that the Federal Crop Insurance Corporation should address the needs of 

producers by expanding pilot programs and coverage under the Federal Crop Insurance Act, in 

general, but specifically including crop revenue insurance for producers of pecans in the State of 

Georgia. A Pecan Revenue Pilot program has been available in Dougherty, Lee, and Mitchell 

Counties, Georgia since 1998, with 102 policies in force and over $7.9 million in liability in 2001.

 The program was evaluated during FY 2001 and 2002. On September 19, 2002, the FCIC Board 

of Directors approved expansion of the pilot program into 79 additional counties in Georgia for 

the 2003 crop year and conversion of the pilot program to permanent status for the 2004 crop 

year. The expansion counties are identified at the end of the section on FY 2002. 

Report on Specialty Crop Insurance. (Section 10006) - This provision requires the Secretary of 

Agriculture to submit to the House and Senate Ag Committees not later than 180 days after the 

date of enactment of the Act (not later than November 9, 2002), a report that describes (1) the 

progress made by the FCIC in research and development of innovative risk management products 

to include cost of production (COP) insurance for specialty crops, with special attention to 31 

named crops; and (2) the progress made by the FCIC in increasing the use of FCIC's risk 

management products by producers of specialty crops, by small- and moderate-sized farms, and in 

areas that are underserved. The requirement for the submission of this new one-time report is 

28 
 

 

different from the requirement for the annual report submitted herein. RMA is preparing the onetime report for submission to Congress. 

Although 21 of the 31 named crops are currently insured (8 are pilot programs), they are not 

covered by a program specifically designed as COP insurance. Six of the remaining 10 named 

crops are at the forefront of the Corporation's research and development priorities, with projects 

underway or planned for awarding during FY 2003. (However, there is no guarantee that a COP 

program is what the producers are interested in or that such a program is feasible.) A seventh 

crop, eggplant, is tentatively planned for study during FY 2005. 

Three named crops (wild blueberries, carrots, and mushrooms) remain. RMA plans to assess the 

interest in a wild blueberry program before entering into a contract or partnership; carrots were 

studied during FY 2001 and are not likely to be recommended to proceed to the development 

stage; and mushrooms have not been moved higher on the priority list due to insufficient interest 

in a program by the mushroom industry. 

A COP insurance concept is currently being researched and developed by AgriLogic, Inc., one of 

the contractors in the FCIC’s research and development pool of contractors under an umbrella 

contract implemented in 2001. Cotton is the first of 12 crops to be researched and developed by 

AgriLogic under their contract task order. All 12 crops are currently insured under other crop 

insurance models, making some of the program development activities easier than would be the 

case for previously uninsured crops. In the research and development of previously uninsured 

crops, new issues and problems are likely to surface, generally making the process significantly 

more difficult. Specialty crops included in the 12 crops currently being researched and developed 

by AgriLogic are almonds, apricots, cranberries, nectarines, onions, and peaches. On October 22, 

2002, the FCIC Board of Directors tabled a docket that would have authorized implementation of 

a Cotton Cost of Production Pilot Crop-Revenue plan of insurance pending resolution of issues 

raised by expert reviewers, Risk Management Agency, Office of the General Counsel, and the 

Board. Additional work remains to be completed before a program will be available to producers. 

Study of Feasibility of Producer Indemnification from Government-caused Disasters. (Section 

10108) - This provision requires the Secretary of Agriculture to study the feasibility of expanding 

eligibility for crop insurance under the FCI Act and noninsured crop assistance under the FAIR 

Act to agricultural producers experiencing disaster conditions caused primarily by Federal agency 

action restricting access to irrigation water, including any lack of access to an adequate supply of 

water caused by failure by the Secretary of the Interior to fulfill a contract in accordance with the 

Central Valley Project Improvement Act. The Secretary is to submit to the House and Senate Ag 

Committees a report that describes the results of the study, including any recommendations. On 

August 14, 2002, RMA entered into an agreement with the Economic Research Service (ERS) to 

conduct this study. The ERS agreement calls for a draft written report to be presented to RMA 

followed by a final written report due to RMA 1 month after ERS receipt of comments on the 

draft report. The final written report will be the basis for RMA's submission to Congress through 

the Secretary. 

PUBLIC AWARENESS AND INPUT OF PRODUCERS AND ORGANIZATIONS 

29 
 

Internet Web Sites 

RMA's Internet home page is devoted to making it easier for producers and other customers to 

access crop insurance data and materials related to the Agency’s work. As the web site is subject 

to change, web site location references below are likewise subject to change. A vast amount of 

information exists on RMA's web site, and interested parties are encouraged to explore and utilize 

the available information. The following is a sample of the information provided via the web site 

at http://www.rma.usda.gov. 

Actuarial Information 

Agent Locator 

Events/Calendar 

Crop Policies 

Crop Weather 

Participation Data 

Pilot Programs 

Feasibility studies (Under Pilot Programs/Archives) 

Publications, including: 

--FCIC Board Briefs and Manager’s reports 

--Summary of Business reports (Under Participation Data) 

--County Crop Program Listings (Under Participation Data) 

--Manager’s Bulletins 

--Research and Development Bulletins 

In some cases, the contractors and partners working on the specific program research, 

development, and evaluation projects maintain updated information on their projects through their 

web sites. As a general rule, the organization that was awarded the project is listed in this report. 

Risk Management Education 

FY 2001 Risk Management Education activities. RMA established a number of risk management 

education programs for specialty crop producers during FY 2001 through partnership agreements 

with State departments of agriculture, universities, and grower organizations. These programs, 

authorized in sections 522(d) and (e) of the Federal Crop Insurance Act, essentially provided 

planning, organization, and delivery of risk management education and information to specialty 

crop producers in a number of States. Topics included survival strategies, risk management 

opportunities for alternative crops, risk analysis and decision support skills to help producers 

manage risks inherent in agriculture, and other general agricultural risk management issues and 

opportunities. 

FY 2002 Risk Management Education Projects. For FY 2002, RMA expanded its educational 

efforts directed to specialty crop producers. The Agency announced the availability of funds for 

risk management education partnerships, with a priority for programs reaching producers of 

commodities not currently covered by crop insurance, specialty crops, and underserved 

commodities. In response to this announcement, RMA received 101 applications requesting $5.6 

million to help RMA deliver risk management education to producers. An evaluation panel 

selected the 72 most meritorious proposals, and RMA will use approximately $3.7 million to fund 

30 
these projects. Many of the funded partnerships will specifically target specialty crop producers 

during FY 2002. Some of the projects build on risk management education efforts for specialty 

crops from FY 2001. These projects are authorized by sections 522(d) and (e) of the Federal 

Crop Insurance Act. The FY 2002 Risk Management Education projects listed in this report in 

general include risk management education programs for small and limited-resource farmers, 

livestock and specialty crop producers, underserved producers including minority operators, and 

other socially disadvantaged operators. These producer education and information sessions and 

publications address a number of specific topics that are categorized under two general themes 

below. 

C Availability and usage of risk management opportunities and tools: 

o Aquaculture processing, direct sales, and marketing techniques 

o Contract production 

o Crop insurance and non-insured disaster assistance program (NAP) 

o Crop production and harvest timing strategies to manage risk 

o Enterprise budgets and market analysis usage to reduce risk through the production of 

alternative specialty crops 

o Enterprise diversification 

o Futures markets 

o Information on specific risk management tools to best fit producers' needs, how the 

tools operate, and where to obtain them 

o Localized risk management decision analysis using computers and other risk 

management decision-analysis tools 

o Marketing specialty crop and aquaculture products to institutional buyers to mitigate 

risk 

o Optimal crop-mix decisions 

C General risk management education and information topics and issues: 

o Agribusiness management 

o Agronomic, economic, and regulatory information regarding canola and wild rice 

production practices 

o Economic concepts (introductory training) 

o Estate planning 

o Farm enterprise evolution and individual expertise enhancement in a time of dynamic 

change in agriculture 

o Farm food safety risks (understanding and managing those risks) 

o Forestry issues 

o Garden center management for nurserymen and growers 

o Global risks 

o Greenhouse tomato production, disease and pest control, economic risks, marketing 

risk, and environmental considerations 

o Landscape design and management 

o Marketing risk (general topics) 

o National retail risks 

o Nursery and landscape industry alternative production, marketing risk, financial risk, 

31 
and health and safety risk 

o Organic production transition through knowledge and exposure to agricultural 

research and statistics 

o Sunflower irrigation information and training 

o Value-added agriculture related products 

o Wholesale marketing risks 

Targeted areas for these programs include Alabama, Arizona, Arkansas, California, Connecticut, 

Florida, Georgia, High Plains States, Iowa, Kentucky, Louisiana, Maryland, Midwest States, 

Minnesota, Mississippi, Missouri, Nevada, North Carolina, Northeastern States, Oklahoma, 

Oregon, Puerto Rico, South Carolina, Southeastern States, Tennessee, Texas, Utah, Virginia, 

Washington, West Virginia, and other States adjacent to those above. 

In addition, RMA administered two other educational programs that benefited specialty crop 

producers during FY 2002. The first was authorized in ARPA as an amendment to section 

524(a)(2) of the Act. This program establishes crop insurance education and information 

programs in States in which crop insurance participation has been historically low. Most of these 

15 States have a relatively high percentage of specialty crop production. Currently, RMA is 

implementing this program by establishing partnerships with State departments of agriculture, 

universities, and others in underserved States. 

Another RMA program to benefit specialty crop producers in the 15 underserved States is the 

Agricultural Management Assistance (AMA) program. RMA administers this program in 

collaboration with Natural Resources Conservation Service and Agricultural Marketing Service. 

RMA’s contribution to AMA is through assistance to producers in the purchase of Adjusted 

Gross Revenue (AGR) insurance, a product particularly well suited for diversified specialty crop 

producers. It guarantees a revenue level for the whole farm, and rewards more diversified 

farmers with higher coverage levels and smaller insurance premiums. 

The FCIC Board of Directors authorized expansion of the AGR program into eight counties each 

in California and Pennsylvania for the 2003 and subsequent crop years. California counties 

included in the expansion are Fresno, Kern, Riverside, San Diego, San Joaquin, San Luis Obispo, 

Tulare, and Ventura. Pennsylvania counties included in the expansion are Crawford, Columbia, 

Erie, Fayette, Lancaster, Schuylkill, Westmoreland, and York. Introduced into 36 counties in 5 

States in 1999, the program is now available in 230 counties in 18 States. 

RMA Community Outreach 

The RMA is funding 46 outreach projects for FY 2002 totaling over $3 million in approximately 

30 States. Through these partnership projects, women, limited-resource, and other traditionally 

underserved agricultural producers will receive program technical assistance and training on the 

availability and use of risk management tools to improve their economic viability. Partners 

include 1890, 1994, and 1862 land-grant universities; Hispanic Serving Institutions (HSIs); and 

community-based and other State organizations serving women, limited-resource, and other 

traditionally underserved farmers and ranchers. 

Consultations with Producers and Producer Groups 

32 
To encourage wide participation and input from producers and other outside organizations, RMA 

seeks their input through consultation memos sent to major organizations and producers who may 

be impacted by the program under consideration. In addition, contractors and partners hold 

listening sessions with producers, producer groups, and insurance company representatives as a 

program is being studied, as recommendations are being developed, and again when alternatives 

are being considered. RMA Regional Offices also serve as a local contact point for such activities 

to ensure that local issues, concerns, and differences are considered. With the new emphasis on 

research and development of programs through contracts and partnerships, producers and 

producer groups are encouraged to participate in listening sessions and other forums that provide 

them the opportunity to become involved in the process. In some cases, the contractors and 

partners working on the projects maintain updated information on their projects through their web 

sites. 

In its rule-making process, RMA staff often contact growers groups when making changes to 

programs. National, State, and regional grower groups, crop associations, and councils are 

contacted as program issues are raised and as programs are being researched, developed, or 

modified. These groups are very helpful in obtaining producer input from various areas of the 

country regarding crop program changes and relaying them to RMA for consideration. In the 

conversion of pilot programs to permanent program status, grower groups are included in the 

evaluation of the program. In addition, grower groups often serve as the catalyst for change by 

advising RMA at the local or national level of concerns with the programs that affect them. 

RMA is also conducting four projects to identify the potential market for specialty crop insurance 

and to provide the data necessary to evaluate options for new or modified insurance programs to 

meet the needs of specialty crop producers. Through these partnerships with researchers at 

Cornell University, Pennsylvania State University, the University of California at Davis, and the 

University of Florida, specialty crops producers were contacted to determine how crop insurance 

programs could be designed to better meet their needs. The results of these contacts are being 

analyzed and are expected in the second quarter of FY 2003. 

Miscellaneous Activities 

RMA representatives have participated in meetings; field visits; training sessions; speaking 

engagements; and other activities with growers, grower association representatives, the insurance 

industry, Congressional representatives, and other public and private organizations to inform 

those individuals and organizations about the Agency's new and specialty crops programs and to 

gather information on the needs and interests of producers. Public awareness of agricultural risk 

management has also been increased significantly by the efforts of representatives of Congress, 

the crop insurance industry, contractors and partnership entities conducting projects for RMA, 

other government agencies, academia, the media, and the agriculture industry in general. 

33 
APPENDIX 

AG COMMODITIES INSURED UNDER 2003 CROP INSURANCE PROGRAMS 

Almonds 

Apples 

Avocado (Revenue*, APH*) 

Avocado Trees (Florida)* 

Barley (APH, IP*) 

Blackberries* 

Blueberries* 

Cabbage* 

Canola 

Cherry (Dollar)* 

Chile Peppers* 

Citrus 

C Grapefruit 

C Lemons 

C Limes 

C Mandarins 

C Murcotts 

C Oranges 

C Tangelos 

C Tangerines 

Citrus Tree (Texas) 

Clams* 

Corn (APH, CRC**, GRIP**, GRP, IP*, RA**) 

Cotton (APH, CRC**, GRP, IP*) 

Crambe* 

Cranberries 

Cultivated Wild Rice* 

Dry Beans 

Dry Peas 

ELS Cotton 

Figs 

Flax 

Florida Fruit Tree* 

Forage (APH, GRP) 

Forage Seed (Alfalfa)* 

Forage Seeding 

Fresh Market Beans* 

Fresh Market Sweet Corn 

Fresh Market Tomatoes 

Grain Sorghum (APH, CRC**, GRP, IP*) 

Grapes 

Green Beans for Canning 

Green Peas 

Hybrid Corn Seed 

Hybrid Grain Sorghum Seed 

Livestock (Swine)* ** (LGM, LRP) 

Macadamia Nuts 

Macadamia Trees 

Mango Trees (Florida)* 

Millet 

Mint* 

Mustard* 

Nursery 

Navel Oranges (Citrus $)* 

Oats 

Onions 

Peaches 

Peanuts (APH, GRP) 

Pears 

Pecan Revenue* 

Peppers 

Plums 

Popcorn 

Potatoes 

Processing Cucumbers* 

Prunes 

Raisins 

Rangeland (GRP)* 

Rapeseed 

Raspberries* 

Rice (APH, CRC**) 

Rye 

Safflower 

Soybeans (APH, CRC**, GRIP**, GRP, IP*, RA**) 

Stonefruit 

C California Apricots 

C California Nectarines 

C California Peaches 

Strawberries* 

Sugar Beets 

Sugarcane 

Sunflowers 

Sweet Corn for Canning 

Sweetpotatoes* 

Table Grapes 

Tobacco 

Tomatoes (Canning and Processing) 

Walnuts 

Wheat (APH, CRC**, GRP, IP*, RA**) 

Winter Squash* 

* Crops/crop programs which are currently insured under pilot programs of limited scope and duration. 

** Crops/crop programs which were submitted and approved under section 508(h) of the FCI Act. 

APH = Actual Production History; CRC = Crop Revenue Coverage; GRIP = Group Risk Income Protection; GRP = Group Risk Plan; 

IP = Income Protection; RA = Revenue Assurance; LGM=Livestock Gross Margin; LRP=Livestock Risk Protection 

(Bold print = 62 specialty crops/63 specialty crop-plan combinations); (88 total crops/114 total crop-plan combinations). 

34