Dollar Insurance Recommended Modifications Report

Dollar Insurance

Recommended Modifications Report Final

Order Number: D17PD00050

Submitted to:

United States Department of Agriculture

Risk Management Agency

Product Administration and Standards Division

Submitted by:

Watts and Associates, Inc.

4331 Hillcrest Road

Billings, Montana 59101

twatts@wattsandassociates.com

DUNS # 112960633

Due Date: December 14, 2017

Watts and Associates, Inc., as a Contractor, has developed this material under contract with the United States Department of 

Agriculture and has exclusive ownership rights in part or all of its format and content. No material presented in any format, 

including orally, in print, or electronically, or that has been viewed, disseminated, or heard, may be further disseminated to any 

unauthorized person or entity. “Unauthorized person or entity” may include, but is not necessarily restricted to, any person who 

or entity that has no official connection to this project under the Federal government, or has not been authorized by Watts and 

Associates, Inc. to review a portion or all of this material. This material is protected by law.
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Table of Contents

I. Executive Summary ..........................................................................................................................1

II. Introduction ......................................................................................................................................4

III. Findings of the Listening Sessions................................................................................................7

IV. Program Modification Recommendations..................................................................................14

IV.A Recommendations Affecting Statute ..................................................................................17

IV.B Recommendations Affecting Regulations..........................................................................17

IV.C Modifications Affecting Actuarial Documents..................................................................19

IV.D Modifications Affecting Procedures...................................................................................20

V. Alternative Plans of Insurance ......................................................................................................21

VI. Quantitative Metrics.....................................................................................................................28

VII. Conclusions.................................................................................................................................32

List of Tables

Table 1. Matrix of a Quantitative Metrics Regarding Potential Modifications of the Dollar Plan 

Insurance for Fresh Market Corn, Peppers, and Tomatoes in the Study Area .................31

Appendices

Appendix A. Summarized Statistical Data – Insurance Experience Select Tables (Entire 

Appendix May Be Found in the Program Evaluation Report Final)

Appendix B. Stakeholder Comments
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I. EXECUTIVE SUMMARY

This Deliverable explores various options for improving or replacing the Dollar Plan of crop 

insurance coverage. It complies with the requirements stated in the Statement of Work (SOW), 

which include:

“The eighth section of the report shall contain the conclusions and 

recommendations. Particularly salient conclusions will be whether (1) an 

acceptable insurance risk does or does not exist, and (2) the plan of insurance is 

appropriate for the crop. The recommendations shall be subdivided into 

individual sections dealings with changes in statute, in regulations, in the 

actuarial documents, and in procedures. Each section shall contain content as 

described in section 6. If it is concluded that a new (or replacement) plan of 

insurance should be adopted for the crop, recommendations of sufficient detail to 

allow development shall be provided in this section.”

The SOW provides that “The Recommendations Report shall contain an introductory summary 

of important issues from the Evaluation Report and provide an overview of the recommendations 

that will be presented in this report. It shall also present whether an acceptable insurance risk 

does or does not exist.”

Overview of Issues from Evaluation Report

Research was concentrated in two areas: a detailed review of the performance of the Dollar Plan

for fresh market sweet corn, fresh market peppers, and fresh market tomatoes with additional 

information from listening sessions involving stakeholders. The detailed review found that, 

while the overall performance of the Dollar Plans included under this SOW generally met 

acceptable standards (overall loss ratio less than 1.00 for peppers and sweet corn for the 18 crop 

years included in the analysis, slightly higher than 1.00, for fresh market tomatoes, and lower 

than the 0.88 target, with a reasonable reserve for peppers and sweet corn), the results were not 

so apposite when the data were dissected by harvest season (practice), minimum value option, or 

by coverage level. The generally more favorable loss ratio performance at coverage levels of 65 

percent and lower, plus the premium from the catastrophic level of coverage is subsidizing the 

higher coverage levels (70 and 75 percent) for the crops overall, so the loss ratio at the crop level 

is much more favorable (see Appendix A). The Contractor also determined that the recent 

reduction in the coverage level relativity for the CAT level of coverage would have increased the 

observed loss ratio for the 18 years by approximately 2 to 6 percentage points had it been in 

effect for the entire time frame. This determination resulted from multiplying the historical CAT 

premiums by year by the ratio of the currently established coverage level relativity to the 

historical coverage level relativity, adding the revised CAT premium amounts by year to the total 

of the additional coverage premium amounts by year, and dividing the historical indemnities by 

year by the revised amount of total premiums by year. The resulting adjusted loss ratio then was 

compared to the actual loss ratios. This determination recognizes a recently introduced change 

to the actuarial structure of the plan 50 crops and appropriately includes it in the measurement of 

performance of the plan as it relates to the crops subject to the review. Similar to the overall 

assessment of loss ratio performance for plan 50 for these crops, the determination has no 

bearing on the potential performance of any replacement insurance plan.
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Performance varied by season, with the fall season being the worst (highest loss ratios) for all 

crops. The winter season generally had favorable performance, and the spring season was 

mixed. Producers typically have opted for the lowest minimum value option, which generally 

has performed worse than the program overall. Staging of the guarantee has done little to 

manage the amount of indemnities. Only marginal improvements in the loss ratios of the three 

crops were determined when the actual loss ratio was compared to the loss ratio calculated 

without stages. Although the percentage of expected revenue (average annual production 

multiplied by average annual price) represented by the guarantees generated under the Dollar 

Plan for these three crops has been quite low historically, frequency of loss when measured by 

the ratio of net determined acres to net reported acres is very high within and among years. This 

is difficult to reconcile with the fact that, historically, a 75 percent coverage level might have 

represented 20 to 30 percent of the revenue expected from sales of the crop. Severity generally 

has been moderately low, indicating losses have been shallow. However, the Reference 

Maximum Dollar Amount (RMDA) has been increasing quite dramatically as a percent of 

revenue per acre. For example, Table 50 of Deliverable 2.4.2 Program Evaluation Report Final

demonstrates the five-year moving average of the RMDA relative to the annual revenue per acre 

for fresh market tomatoes (as derived from data reported by NASS) was less than 50 percent 

until 2011. Beginning 2011, the ratio has exceeded 50 percent in every year, reaching a high of 

81 percent in 2015. As a consequence, the effective coverage level is increasing relative to

(though still generally smaller than) the nominal coverage level.

The foregoing summary of program performance indicates an insurance program that is not 

healthy. It has achieved generally positive results by fortuitous offsets among coverage levels, 

and practices (seasons). The increase in the effective coverage level (higher RMDA) raises 

questions about future performance.

Sources of data of adequate quality and sufficiency to establish reliable estimates of the RMDA, 

the allowable cost, and the minimum value are becoming increasingly scarce as the Extension 

Service, land grant universities, and the National Agricultural Statistics Service (NASS) 

reorganize priorities to respond to budget constraints. This is especially true of data that enable 

specification of these parameters by season of production. Moreover, the proliferation of 

additional types offered (particularly in tomatoes) has placed even greater leverage on data; the 

quality of which has continued to erode.

With regard to grower and stakeholder feedback gathered in listening sessions, many producers 

feel the coverage available under the current program provides inadequate management for their 

actual costs of production and market risks. Several producers indicated that the program was 

constructed in a way that addressed the needs of the producer (i.e., indemnities were paid 

regularly and at levels commensurate to perceived losses) when it began. They stated changes to 

the program implemented by the Risk Management Agency (RMA) since that time have 

progressively reduced the effectiveness of the program to meet the producer’s risk management 

needs. Several producers and agents indicated the program would be enhanced by using more 

accurate pricing and updating the input costs of production with “real numbers from participants 

in the program.” Stakeholders in the listening sessions and during phone conversations generally 

voiced their lack of understanding about how the value of production and the cost of production 

per acre are established by the program. In the minds of the stakeholders, these aspects of the 
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program should be transparent and easily understood. Overall, the current program is not well 

accepted by industry stakeholders who attended the meetings or engaged in conversation with 

the Contractor. (A summary of comments received is provided in Appendix B.) Some 

stakeholders voiced support for an insurance plan based on individual history (Actual Production 

History (APH) or Actual Revenue History (ARH)).

Fundamentally, there are a number of critical structural flaws inherent in the Dollar Plan design. 

The guarantee is established on a county (or other area) basis, but loss adjustment is performed 

on an individual basis. Two producers in the same county will have identical guarantees at a 

given coverage level even when their yields, revenues, and margins can be expected to be 

substantially different. This phenomenon results in strongly different effective coverage levels, 

expected frequency/severity of loss, and expected indemnity among producers who are paying 

the same premiums. Even if average rates are sufficient to cover overall program losses among 

an unbiased pool of insureds, this creates unappealing incentives for better-than-average 

producers to avoid participation and below-average producers to purchase coverage beyond their

narrowly defined risk management needs. Perhaps most condemning of all, there is no 

mechanism to adjust a given grower’s guarantee in future years based on consistent and/or major 

losses in past years. This, combined with the previously identified design flaws, creates an 

unvirtuous cycle wherein a consistently worsening pool of insureds triggers losses that 

incrementally drive up premium rates, driving the best of the remaining participating producers 

to leave the program, again worsening the pool of remaining insured growers and restarting the 

cycle.

Overview of the Recommendations

Based on the program review, a review of available data sources and reports, and the input of 

stakeholders, the Contractor concludes that the Dollar Plan in the study area as currently 

established for these three crops is not sustainable. Despite strong efforts on the part of RMA 

staff, Approved Insurance Provider (AIP) personnel, a number of very good agents, and even 

producers themselves to attempt to continue to obtain and service needed information, the 

Contractor is obliged to report that the available data are wholly inadequate to support 

development of the RMDA, the allowable cost, or the minimum value for the crops included in 

this report. While the scope of research was limited to three crop programs in the Southeast and 

all findings for this study may not be fully applicable to all other instances, the Contractor is of 

the opinion that many of the same negative characteristics exist and are inherent in the dollarbased plan of insurance.

The overriding recommendation of the Deliverable is that the insurance plan for these crops be 

converted to an individual plan of coverage (with an initial focus on the APH plan, and eventual 

consideration of a revenue-based individual plan if sufficient data can be identified and 

consistently obtained). The Contractor approaches justification for this recommendation by 

identifying issues with regard to alternatives that include modifications to the Dollar Plan. The 

Contractor acknowledges the long history these plans have accumulated and the constituency 

that has formed around them as the only insurance option available for these crops in the 

applicable counties. While replacement of these plans with more suitable and sustainable 

alternatives is the preferred approach, recommendations are also offered to marginally mitigate 

some of the effects of the problems with the current offerings.
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II. INTRODUCTION

The SOW specifically separated the required sections of a program evaluation report as 

described in the Program Evaluation Handbook (PEH) for this contract into separate 

deliverables. The SOW instructions to the Contractor for Deliverable 2.4.1 Program Evaluation 

Report Draft include:

“Items 1 through 7 of Section 7 of the PEH shall be included in the Draft 

Evaluation.”

While:

“Item 8 of Section 7 of the PEH will be found in the Recommendations Report.”1

Item 8 of Section 7 in the PEH instructs the evaluator that:

“The eighth section of the report shall contain the conclusions and 

recommendations. Particularly salient conclusions will be whether (1) an 

acceptable insurance risk does or does not exist, and (2) the plan of insurance is 

appropriate for the crop. The recommendations shall be subdivided into 

individual sections dealings with changes in statute, in regulations, in the 

actuarial documents, and in procedures. Each section shall contain content as 

described in section 6. If it is concluded that a new (or replacement) plan of 

insurance should be adopted for the crop, recommendations of sufficient detail to 

allow development shall be provided in this section.”2

Item 1 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Executive Summary of the Evaluation Report. The primary instruction found in 

the PEH for the Executive Summary is “This summary will contain the recommendations 

together with a brief justification for each.”

3 Since the SOW places the recommendations 

section as a separate deliverable, the Contractor, instead, summarized the primary findings of the 

evaluation effort in the Executive Summary contained in Deliverable 2.4.2 Program Evaluation 

Report Final. The Executive Summary contained in this report responds to the instructions 

contained in the PEH for Item 1 of Section 7.

Item 2 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Initial Data Collection section of the Evaluation Report. The primary instruction 

found in the PEH for the Initial Data Collection section is the section will contain “the 

descriptive program summary.” While evaluating the information gleaned during the initial data 

collection, the Contractor found that “Data quality problems in establishing reference values are, 

in many aspects, more disruptive in dollar plan insurance than establishing pricing in insurance 

under other plans, as the reference values directly affect the trigger point for indemnities.” 4

Item 3 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Listening Sessions section of the Evaluation Report. The primary instruction 

found in the PEH for the Listening Sessions section is the “Comments collected from the 

listening session shall be categorized ... and shall be concise, accurate, comprehensive, and well 

 

1 USDA RMA, Dollar Plan Review Statement of Work, page 50 of 58.

2 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 27.

3

Ibid, page 26.

4 Dollar Plan Review, Deliverable 2.4.2. Program Evaluation Report Final, Executive Summary.
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organized.”

5

 The Contractor found “The stakeholders who provided input were exceptionally 

knowledgeable about a complex insurance offer and generally expressed strong support for 

continued availability of crop insurance, either through the current dollar plans, or through some 

subsequent plan.”6

Item 4 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Industry Research Analysis section of the Evaluation Report. The primary 

instruction found in the PEH for the Industry Research Analysis section is “A primary focus of 

the discussion should be structural changes in the industry and their potential impact on the crop 

insurance program under review.”

7

 The Contractor found “Unfortunately, availability and 

quality of the sparse data upon which the program was developed has eroded during the period 

the insurance has been offered. This has compromised the sustainability of a program that was 

built on a series of actuarial and underwriting assumptions that were challenging to address even 

when more data were available.”

8

Item 5 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Program Evaluation Tool section of the Evaluation Report. The primary 

instruction found in the PEH for the Program Evaluation Tool section is that it “shall contain a 

thorough discussion of the findings from use of the Program Evaluation Tool.”

9

 The Contractor 

found “there are a number of critical and fundamental problems with the Dollar Plan design for 

the offers evaluated in the study area.”10

Item 6 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Evaluation Components section of the Evaluation Report. The primary 

instruction found in the PEH for the Evaluation Components section is that “Data contained in 

this section must be highly summarized. Discussions shall focus on the meaning of the data and 

not upon describing the numbers.”

11

 Additionally, the SOW included several “Additional 

Requirements” regarding changes to the specific instructions for elements within the Evaluation 

Components description of work found in the PEH. Among these were:

 A full review and report of these components as described in Sections 3 B (4) and 3 B (5) 

of the PEH (Loss Adjustment Standards Component, and Underwriting Standards 

Component, respectively) will not be completed.

 “In lieu of Section 3 B (8) of the PEH (Plans of Insurance Component), an analysis of the 

quality, scope, and availability of data from all available data sources in order to 

determine actuarially sound prices and rates for each of the value-based components for 

the Dollar Plans specified in Section 2.1 of this solicitation.”

 “Section 3 B (9) of the PEH (Data Acceptance Requirements) is not required for this 

evaluation and will not be completed.” and

 

5

 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 26.

6

 Dollar Plan Review, Deliverable 2.4.2. Program Evaluation Report Final, Executive Summary.

7

 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 26.

8

 Dollar Plan Review, Deliverable 2.4.2. Program Evaluation Report Final, Executive Summary.

9

 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 26.

10 Dollar Plan Review, Deliverable 2.4.2. Program Evaluation Report Final, Executive Summary.

11 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 26.
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 “Section 3 B (12) of the PEH (Program Delivery Component) is not required for this 

evaluation and will not be completed.”

The Contractor complied with these and the other Additional Requirements found in the SOW.

Item 7 of Section 7 in the PEH provides instructions to the evaluator as to what is expected to be 

included in the Unpublished Data Report section of the Evaluation Report. The primary 

instruction found in the PEH for the Unpublished Data Report section is that it shall provide 

information “detailing the statistical analysis of the performance of the crop program.”

12

 The 

Contractor found “In general, the loss ratio performance for the products under review is within 

generally acceptable standards... However, as demonstrated in the review, the overall favorable 

loss ratio performance results from an excess of premium at the CAT level and at additional 

coverage levels of 65 percent or lower.”

13

Many of the recommendations and conclusions contained in this report were influenced by the 

stakeholders who attended listening sessions or reached out to the Contractor over the period of 

the evaluation effort. The listening session section of the Program Evaluation Report Final is 

provided herein as a quick reference for readers of this report.

Overall, the Contractor found there are fundamental structural problems within the Dollar Plan of 

Insurance for Fresh Market Sweet Corn, Fresh Market Peppers, and Fresh Market Tomatoes. 

Following the Listening Session section of this report, the remainder of this report addresses the 

requirements identified in the SOW and described in the PEH for Item 8 of Section 7 in the PEH. 

Namely, the Conclusions and Recommendations section of the full Program Evaluation Report 

Final delivered to RMA in June, 2017 and modified per interaction and discussion with RMA 

thereafter.

 

12 USDA RMA, Program Evaluation Handbook, 2006 and Succeeding Crop Years, page 27.

13 Dollar Plan Review, Deliverable 2.4.2. Program Evaluation Report Final, Executive Summary.
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III. FINDINGS OF THE LISTENING SESSIONS

This section of the evaluation summary report contains a discussion of the results from the 

efforts by the Contractor to gather input from fresh market peppers, tomatoes, and sweet corn 

industry stakeholders in the regions identified in the SOW,14 specifically, Alabama, Florida, and 

Georgia.

The Contractor conducted three on-site stakeholder listening sessions. In addition to traditional 

listening sessions, the Contractor had considerable success in obtaining useful stakeholder 

feedback through one-on-one discussions. In this review, stakeholders were unusually engaged 

and motivated to provide their impressions of the program, share their experiences, and reflect on 

past changes to the program. Moreover, the growers and the agents who market the program are 

very competitive and consider their experiences proprietary. They expressed a greater 

willingness to be fully forthcoming in one-on-one conversations than in a group environment. 

Relative to past feasibility studies and program reviews, the stakeholders in Florida and Georgia 

were unusually familiar with the specific details of the Dollar Plans, and strongly vested in the 

availability of coverage for their specialty crops. The Contractor participated in protracted 

telephone conversations with four large growers from Florida, as well as with representatives of 

the Florida Fruit and Vegetable Association (FFVA). Additionally, the Contractor participated 

in the FFVA sweet corn growers meeting via telephone three weeks prior to the first on-site 

listening session in Florida and encouraged participation at the upcoming on-site listening 

sessions.

During these meetings, the Contractor engaged industry stakeholders in conversations regarding 

1) the level of knowledge attendees had of the Dollar Plan of Insurance for their crops, 2) use of 

the program, 3) needs of the industry being met by the program, 4) impacts (both positive and 

negative) of the program on the industry, 5) suggested improvements to the program, 6) 

alternative programs for their crops, and 7) other issues raised by the attendees during the 

session. Both the Dollar Plan of Insurance and the WFRP program were discussed at each 

session.

The program evaluation handbook instructs the Contractor to determine, as possible, the answers 

to the following list of questions while remaining in compliance with the Paperwork Reduction 

Act:

“(a) Do producers have knowledge of the program?;

(b) Why producers elected or did not elect to use the program to meet their 

risk management needs;

(c) Did the program meet the growers’ risk management needs?;

(d) How the program affected the growers;

(e) What effect did the program have on the market?;

(f) What improvements are needed to enhance the effectiveness of the 

insurance program?;

(g) Other concerns or issues with the program;

(h) Impact of program requirements on existing sales and marketing of the 

crop;

 

14 Alabama, Florida, and Georgia.
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(i) Are there any issues, policy limitations or other factors associated with the 

pilot insurance program that have inferred or required the growers to 

change there [sic] farming practices to meet insurability requirements?;

(j) Is this an appropriate risk management model/plan of insurance for the 

crop?;

(k) If not, what type of risk management model/plan of insurance would be 

appropriate for the crop?;

(l) Overview of program acceptance;

(m) Identify any inconsistencies between the program materials, the rating 

and pricing methodologies, forms completion and/or the delivery of the 

program; and

(n) Identify potential for the insurance program to cause overproduction of 

the crop, leading to market price decline or collapse.”15

The initial effort at garnering interest in the project within the vegetable industry came at the 

invitation of the FFVA. As noted earlier, the Contractor participated in a meeting of the FFVA 

sweet corn growers meeting on January 27, 2017 by teleconference organized by FFVA. This 

call was intended primarily as an educational and recruiting tool for the Florida listening 

sessions. The half hour call was attended by nearly 35 individuals representing growers, 

insurance agents, and local extension service personnel. The Contractor introduced the firm, the 

contract, and the focus of the evaluation. Participants had few questions. Most of the questions 

focused on historical changes to the Dollar Plan which were viewed as negatively impacting the 

sweet corn industry in Florida. Several of the participants at this meeting also grow peppers and 

tomatoes. Several follow-up emails and calls were exchanged following this teleconference.

In the following paragraphs, the Contractor provides a brief overview of the on-site listening 

session meetings. Analysis of appropriate issues raised by the participants in those meetings are 

discussed in the appropriate sections of the Program Evaluation Report Final – rating, 

underwriting, pricing, loss adjustment, insurance experience, etc. The Contractor traveled to 

West Palm Beach and LaBelle, Florida to speak with fresh market pepper, tomato, and sweet 

corn and industry stakeholders in the counties with the highest number of policies earning 

premium as published on the RMA summary of business website. The Contractor then drove to 

Bainbridge, Georgia to speak to fresh market sweet corn industry stakeholders in the county with 

the largest number of policies earning premium in Georgia. This location also was selected 

because of its relative closeness to Baldwin County, Alabama (the only county in Alabama with 

insured production addressed in this evaluation). Appendix B contains comments received 

grouped by theme.

Although the Contractor was informed that agents and growers had historically expressed their 

impressions of the program passionately and even, at times, angrily, the level of decorum at each 

of the scheduled sessions was very professional. The stakeholders demonstrated an unusually 

strong and detailed understanding of the nuance and history of the current program and offered 

insights at a level the Contractor has rarely encountered from stakeholders previously.

 

15 USDA, RMA, 2005, Program Evaluation Handbook, FCIC-22010 (09-2005), pages 22 and 23.
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West Palm Beach, Florida

The Contractor traveled to West Palm Beach, Florida to conduct a listening session on February 

28, 2017 and met with six fresh market pepper and tomato and crop insurance industry 

stakeholders. Participants at this session included two growers, three insurance agents, and a 

representative from the RMA Valdosta Regional Office. There was general participant 

agreement that under the current Dollar Plan, MVO cannot “work” if the grower is honest in its 

use and WFRP is difficult to justify using because the maximum revenue/liability threshold is 

too low for fresh market operations in Florida and growers reported indemnity payments 

associated with this coverage are not received by the grower until the following year. Both 

growers and agents voiced substantial skepticism as to the appropriateness of using AMS prices 

to value production. Attendees reported that growers and fresh market produce operations 

provide this pricing data to AMS and, many times, inflate the prices to maintain high values for 

contract market price and other purposes. Participants could not identify an alternative 

government source for pricing of fresh market peppers, tomatoes, or sweet corn in this region. 

Some of the growers did offer to share their individual pricing histories with the Contractor. One 

major concern raised during the session was the establishment of the actual cost of production 

for peppers and tomatoes in Florida. There was a general consensus that post-harvest costs of 

tomato production have been around $12,000 to $14,000 per acre for 3 to 4 years and that 

peppers production costs are currently about $14,000 per acre, substantially more than the 

RMDA.

Several participants indicated that they feel the North American Free Trade Agreement 

(NAFTA) has had a detrimental effect on the industry in Florida. Growers noted that it was their 

perception that production in Mexico was being dumped into the American market at prices that 

were less than their anticipated production costs and expressed concern that the imported 

production was grown in a regulatory environment without the strict environmental, food safety, 

or labor rules to which American producers must adhere. While limited quantitative data 

regarding the volumes of imported tomatoes was identified, growers attributed recent reductions 

in market prices to plentiful supplies of imported production being offered to their traditional 

customers, particularly in the food service supply channels. Growers reiterated the importance 

of price risk as a critical component of the risks their operations face.

MVO changes in recent years have been a point of contention in this growing region. The 

stakeholders in the meeting were confused and concerned about how RMA developed the current 

MVO value and what caused the removal of the MVO II. There was a general perception on the 

part of the participants in the meeting that RMA is not aware of or paying attention to the local 

conditions, and moreover voiced a generalized skepticism of government at all levels and 

functions. Stakeholders believe RMA and loss adjusters are looking only at data for the state, 

and do not factor in individual circumstances. The attendees reported concern that suspicion of 

fraud is the basis from which the government begins its investigations. The current system that 

uses growth stages for different levels of coverage is not well liked, although early stage losses 

are infrequent. Growers emphasized the need for continued availability of crop insurance for 

their crops, and requested that the report include their urging that if dollar plans are to be 

replaced, that they not be removed until a suitable new program can be put into place.
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LaBelle, Florida

The Contractor traveled to LaBelle, Florida to conduct a listening session on March 1, 2017 and 

met with three fresh market pepper and tomato and crop insurance industry stakeholders. 

Participants at this session were two insurance agents and a representative from the RMA 

Valdosta Regional Office. The participants in this meeting felt the Dollar Plan should be 

adjusted to address the increasing market risk in the industry brought about by Mexican 

protected agriculture programs, their imports, and the effect of those imports on the fresh market 

produce sector. The loss of the zero value MVO for the program resulted in many growers 

deciding to stop participating in the program. The agents expressed their concern that the 

guidelines for loss adjusters seem to be very open to interpretation by the AIPs. This, in turn, 

has led to inconsistencies associated with how a company will adjust the claims. Appraisals of 

production left in the field or potential production can vary substantially between companies and 

between adjusters. Some AIPs are requiring post-harvest loss appraisal samples be sent to the 

USDA for grading. This practice can have a negative impact on the marketability of the rest of 

the crop as the crop deteriorates over the time period it takes for the samples to reach USDA 

graders, be graded, and have the grading report complete and returned to the loss adjuster.

One area that is not currently covered in the fresh market sweet corn plan is grading as “Fancy”. 

The current market has a high demand for this grade of sweet corn which is not currently 

insurable as a unique entity under the Dollar Plan. The Dollar Plan insures a number 1 (one size 

smaller than fancy). Over time, the industry has moved toward production of the larger ears.

Under the Dollar Plan, growers are required to harvest the crop several times for some crops 

(peppers and tomatoes). New hybrids for these crops enable the growers to harvest fewer times. 

The insurance plan should be based on the grower’s total yield, not number of pickings. 

Additionally, some risks to production that occur before harvest do not reveal themselves until 

after harvest. These risks, such as the white fly which causes mottling in tomatoes, can result in 

rejection of the crop at market – a total loss to the grower. This peril was perceived as an 

insurable peril when the tomato program had a zero value MVO. Participants indicated that the 

allowable costs value in the policy is irrelevant in light of the MVO value. One participant stated 

they would rather see the policy left alone than replaced with an unknown alternative. The other 

participant indicated a policy based on the grower’s own revenue history might be very 

interesting to their clients. One issue that was raised during this session dealt with the timing of 

tax filing against the crop policy dates. In the opinion of the participants, any replacement 

revenue policy should not be tied to the grower’s Schedule F tax forms as the time period 

covered for the forms is not conducive to the policy dates for the crop being grown.

Bainbridge, Georgia

The Contractor traveled to Bainbridge, Georgia to conduct a listening session on March 2, 2017 

and met with five fresh market sweet corn and crop insurance industry stakeholders. There were

three insurance AIP representatives, an extension agent, and a representative from the RMA 

Valdosta Regional Office at this session. Most of the participants at this session were fairly 

comfortable with the fresh market sweet corn policy. There was some discussion about the 

possibility of creating a hybrid insurance plan using the best of the Dollar Plan and an APH plan. 

As in the previous two sessions, AMS data was considered as being “suspect and untrustworthy.” 

Labor shortages were discussed during this session as well as publicized “food scares” 
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devastating the fresh vegetable market even when the event occurred in a distant market within 

the United States. Labor tends to migrate northward and if Florida crops are late arriving, the 

laborers availability to Florida and Georgia growers suffers. Georgia growers have requested an 

expansion of the Dollar Plan for tomatoes into Georgia on several occasions and wondered why 

their requests continue to be denied. Many tomato and pepper growers in Georgia have left 

those markets as a result of the import pressure from Mexican production of those crops. Sweet 

corn appears to have been not impacted as much to date. Many growers use the sweet corn 

product as a catastrophic safety net for when the intense heat in the southeast causes the grower 

to leave acres unharvested.

Many regulatory requirements have been placed on the fresh vegetable market in recent years 

(2012 - 2017) by both state and federal regulators. These regulations increase the cost of 

producing crops, yet the Dollar Plan does not appear to account for these added costs in their 

input cost calculations as they increase over time. One participant indicated an area-based 

program which provides coverage guarantees closer to the actual costs associated with producing 

the crop would be a better option for farmers. Again, the WFRP maximum revenue provision 

excludes many growers in this area from using it as a risk mitigation tool. One AIP 

representative indicated there just was not much interest in the sweet corn dollar plan policy in 

that area, which has upwards of 25,000 acres of sweet corn spread over 8-10 growers.

The overall acreage participation in the insurance plan is decreasing. Competition from imports 

and other pressures are driving growers to alternate crops or into other businesses. Many of the 

larger growers also have Mexico-based operations in place, allowing them to work both sides of 

the import market issue.

The Contractors responds to the PEH questions in order for all issues addressed in the listening 

sessions.

“(a) Do producers have knowledge of the program?”

Yes, and many have either used the program in the past or are currently using it as part of 

their risk management practices.

“(b) Why producers elected or did not elect to use the program to meet their risk management 

needs.”

Many growers feel the coverage available under the current program provides inadequate 

management for their actual costs of production and market risks. Those who do elect to 

use the program indicated their financial institution required the grower have crop 

insurance as a guarantee for the operating loan.

“(c) Did the program meet the growers’ risk management needs?”

Several growers indicated that when the program began in the early 1990s, it was 

constructed in a way that addressed the needs of the grower (i.e., indemnities were paid 

regularly and at levels commensurate to perceived losses). Changes to the program 

implemented by RMA since that time have progressively reduced the effectiveness of the 

program to meet the grower’s risk management needs.
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“(d) How the program affected the growers?”

Growers and agents both indicated that the program has become less effective over time, 

and consequently has had less of a positive effect on growers. One grower in particular 

indicated to the Contractor that the program had historically kept them in business in bad 

market or production years. This grower went on to say that the current program 

indemnities “barely cover the premium cost.”

“(f) What improvements are needed to enhance the effectiveness of the insurance program?”

Several growers and agents indicated the program would be enhanced by using more 

accurate pricing and updating the input costs of production with “real numbers from 

participants in the program.” Additionally, some growers believe wind should be 

included as a cause of loss for peppers and that the coverage period needs to be 

lengthened to provide insurance during the third picking of tomatoes. Growers also 

voiced their opinion that all tomatoes do not carry the same cost of production as is 

implicit in the insurance program. Several participants stated that cherry and grape 

tomatoes can cost as much as three times as much as round tomatoes to produce, yet the 

program uses the same $9,000 per acre value for all three. Some participants indicated 

that the sweet corn market has changed and the Dollar Plan needs to be modified to 

include grade “Fancy” sweet corn as insurable.

“(g) Other concerns or issues with the program?”

Every stakeholder in the sessions and during phone conversations voiced their lack of 

understanding about how the value of production and the cost of production per acre are 

established by the program. In the minds of the stakeholders, these aspects of the 

program should be transparent and easily understood. One grower indicated it was their 

experience that RMA and the OIG of USDA have different definitions for marketable 

production and maintenance of a crop after losses are reported. This grower 

recommended a standard definition should be published and used ubiquitously within the 

USDA. Growers perceive the relatively frequent investigations into program 

performance, reviews of the program, and changes to coverage offered constitute a 

“witch hunt,” which has made the program less attractive, but not improved its general 

function or efficacy.

“(j) Is this an appropriate risk management model/plan of insurance for the crop?”

Most growers indicated this was the best product available outside of individually 

focused insurance products like Revenue Protection (RP) and ARH. In further 

conversation with the Contractor, these stakeholders agreed these products had their own 

limitations and issues when applied to the fresh market crops under evaluation.

“(k) If not, what type of risk management model/plan of insurance would be appropriate for the 

crop?”

Of the more than 30 growers engaged by the Contractor in the listening sessions, 

teleconference, and one-on-one telephone conversations, 2 growers mentioned the ARH 

plan of insurance might be appropriate as most growers in the industry are keeping 

detailed price and cost data for other programs and could relatively easily provide those 

to RMA in support of an ARH style program for fresh market crops.
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“(l) Overview of program acceptance;”

Overall, the program in its current rendition is not well accepted by those in the industry 

stakeholders who attended the meetings or engaged in conversation with the Contractor.

Listening Sessions are conducted by agenda to address issues in the Paperwork Reduction Act. 

In spite of repeated efforts by the Contractor to obtain comments from stakeholders regarding the 

following questions from the Program Evaluation Handbook, no stakeholder chose to address 

those subjects. The Contractor is very aware of the constraints of the Paperwork Reduction Act 

and fully conformed with those constraints.

“(e) What effect did the program have on the market?

(h) What is the impact of program requirements on existing sales and marketing 

of the crop?

(i) Are there any issues, policy limitations or other factors associated with the 

pilot insurance program that have inferred or required the growers to 

change their farming practices to meet insurability requirements?

(m) Identify any inconsistencies between the program materials, the rating and 

pricing methodologies, forms completion and/or the delivery of the 

program.

(n) Identify potential for the insurance program to cause overproduction of the 

crop, leading to market price decline or collapse.”
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IV. PROGRAM MODIFICATION RECOMMENDATIONS

The Contractor identified several areas within the current program in need of revision. In this 

section, the Contractor addresses modifications to the current program necessary to address those 

areas and assesses each recommended modification in the light of conformity to the following 

requirements identified in the Statement of Work (SOW):

 Conform to RMA’s enabling legislation, and identify potential changes to regulations, 

and procedures;

 Be ratable and operable in an actuarially sound manner;

 Control or eliminate moral hazards;

 Not change market behavior or create market distortions that change or influence 

producer decisions to plant one crop over another; and

 Be marketable (i.e., based on listening sessions with crop producers, there must be an 

expectation of demand for the revised/new program).

The primary modifications to the existing Dollar Plans addressed by the Contractor are: Require 

a Production (Revenue) Report to Modify the Guarantee, Require Proof of Yield Loss as a 

Condition of Eligibility for an Indemnity, Promulgate Rules to Establish the Appropriate Value 

of RMDA, and Establish the RMDA as a Percent of Average Revenue. Each of these 

modifications is discussed in the following paragraphs individually.

Require a Production (Revenue) Report to Modify the Guarantee

The Dollar Plans as constituted provide an area-based guarantee with individual loss adjustment. 

Unlike other insurance plans with individual loss adjustment, there is no “feed-back” loop that 

incorporates the performance of individual producers to modify that producer’s guarantee for 

future years. This feature is important when individual performance results in consistent and 

persistent indemnities. Under Dollar Plans, the guarantee for each producer who elects the same 

coverage level is identical regardless of prior performance and never changes unless RMA elects 

to modify the RMDA for all producers.

Section 3(f) of the Basic Provisions (17-BR) requires the insured to “... report all production of 

the crop (insured and uninsured) to us for the previous crop year by the earlier of the acreage 

reporting date or 45 days after the cancellation date, unless otherwise stated in the Special 

Provisions or as specified in section 18.” Section 18 concerns Written Agreements and thus does 

not affect routine duties of the insured under the crop insurance program. The Crop Provisions 

for Dollar Plan crops waive this requirement; hence, production reporting is not a required duty 

of the insured.

This requirement is modified under ARH by requiring that both production and revenue be 

reported. Since the RMDA represents a portion (adjusted for some costs) of expected revenue, 

the policy and procedures of ARH are most applicable to this modification of the Dollar Plans. 

Revenue and production per crop insurance unit are the only variables producers can fully 

document. Production costs, the basis of the RMDA, are difficult to isolate and quantify at the 

unit level because unbiased third-party data is difficult to capture or does not exist. Thus, a 

database of annual revenue amounts is the indicated choice of a variable to accumulate and 

utilize for managing the RMDA to measure the potential risk of individual producers.
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Incorporating a feed-back loop into the Dollar Plan model is not a simple matter of applying the 

procedures set forth in 7 CFR Part 400 Subpart G and the supporting instructions found in the 

Crop Insurance Handbook (CIH). Under Dollar Plans, the reported actual revenue derived from 

sales of the crop for any season should exceed the RMDA for many producers, and the average 

of reported revenue over time most likely will exceed the RMDA. Thus, average revenue does 

not determine the appropriate adjustment to the RMDA because the ratio of average revenue to 

RMDA most likely will exceed 1.00.

The database for the Dollar Plan can consist of the annual reported revenue amounts. However, 

similar to yield substitution and other adjustments to APH, the process for calculating the 

approved RMDA would make substitutions as needed. For example, if an annual revenue 

amount exceeds the RMDA, the value min(RMDA, actual revenue) could be incorporated into 

the calculations. This is substantially the same as yield substitution, wherein the calculation is 

max(actual yield, 0.60 * t-yield). In this manner, if a producer never had a claim during the base 

period, the guarantee would continue to be based on the RMDA. A claim would reduce the 

guarantee by the ratio of the approved (limited) revenue amount to the RMDA. The actual 

calculation would be min(approved (limited) revenue amount, RMDA) x coverage level percent.

The approach outlined above will never allow a producer to achieve a guarantee based on the 

RMDA if a claim ever is filed within the ten-year base period. This outcome results from the 

fact that the upside is limited (the RMDA) whereas the downside is not. Under APH, yields 

above average and yields below average provide offsets to each other. Unfortunately, under 

Dollar Plans, there is no natural means by which an appropriate value higher than the RMDA can 

be included for any annual revenue greater than the RMDA. Some investigation would be 

needed to establish a formula that would allow the RMDA in the presence of a limited number of 

loss events.

This action does not address the observation by interested parties that the process for determining 

the RMDA is not transparent. It is a means to address the observed outcome that losses are paid 

very frequently at higher coverage levels with no impact on future guarantees.

Require Proof of Yield Loss as a Condition of Eligibility for an Indemnity

Although the description of Dollar Plans as provided by RMA on its website16 states that these 

insurance plans provide protection against loss of value due to a yield shortfall (see above), there 

is nothing in the Crop Provisions or the Loss Adjustment Standard Handbooks that establishes 

this condition of eligibility for an indemnity. Instead, the Settlement of Claim section of the 

respective Crop Provisions states the following calculations apply:17

RMDA x coverage level percent x insured acres - ∑ units soldj x max(price per unitj –

allowable cost, minimum value)

where the subscript j denotes the number of units sold at a particular price. This is the manner in 

which the value of production to count is captured on the Harvested Production Worksheet. The 

effect of the entries on the Harvested Production Worksheet is that the weighted average of the 

 

16 USDA RMA, Policies, Dollar Plan, https://www.rma.usda.gov/policies/, accessed October 2017.

17 For simplicity, uninsured losses, appraisals, and other aspects of the loss adjustment process are not included.
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net values is determined, and this result is multiplied by the total number of units sold. In the 

event the producer has elected a minimum value option, the minimum value term in this 

expression is replaced by the amount for that minimum value option. The issue is this: if one or 

both of these prices is too low, it is possible that an indemnity could be triggered with no yield 

loss. While that is not necessarily a structural problem (it is quite possible for a revenue policy 

to trigger with no yield loss) it is contrary to stated intent of Dollar Plan policies.

Should RMA choose to maintain the current Dollar Plan for these crops, the Contractor 

recommends RMA implement a policy change wherein the insured is required to submit proof 

that the actual yield is less than the area-based yield on which the RMDA is based. This change 

will help to achieve the stated goal that any indemnity is due to a yield shortfall. It does not 

guarantee that the entire amount of the indemnity is due to yield loss.

Promulgate Rules to Establish the Appropriate Value of RMDA

Dollar Plans presently are not subject to codified rules regarding the establishment of the 

RMDA. This lack provides opportunity for interested parties to request ever higher amounts for 

this program parameter. One outcome of this situation is that effective coverage levels (relative 

to expected revenue) have been increasing as documented in the research report.

Promulgation of rules via the Federal Register, along the lines of 7 CFR Part 400 Subpart G 

provides a means of assuring a consistent methodology is followed. Since the process requires 

opportunity for public input, interested parties must make their positions known during the 

comment period.

The sole purpose of this option to modify the structure of the Dollar Plan model is to provide a 

consistent framework for establishing this critical program parameter and minimize pressures for 

ever greater amounts. Given the paucity of published data and the lack of standardization of 

available information, it would be difficult to set forth a standardized methodology along the 

lines of APH. For this reason, the Contractor recommends an alternative approach for 

establishing the RMDA if codification of process is deemed desirable.

Establish the RMDA as a Percent of Average Revenue

The RMDA is cost of production based. Unfortunately, the amount of resources dedicated by 

land-grant universities and the extension service to developing and publishing such data has been 

decreasing. This is resulting in a less objective basis for determining the RMDA.

Variable costs of production, according to economic theory and common sense, must be less than 

expected revenue. The total cost of production over the long term is equal to the expected 

revenue per unit of production where total cost is defined as variable costs plus fixed costs plus 

profit. Therefore, the variable production costs must be some fraction of the expected revenue.

Expected revenue is much more readily available than costs. A historical series of average yields 

and average prices can be obtained from NASS data. The data may not be as granular as 

producers would prefer for establishing guarantees by seasons or by other parameters. However, 

if the Dollar Plan is to be continued for a crop, a basis other than searching for possibly non-
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existing production budgets with sufficient precision in terms of defining costs most likely will 

be needed.

IV.A Recommendations Affecting Statute

“(1) Recommendations that affect statute are those that cannot be implemented 

unless the Federal Crop Insurance Act or other Federal law is modified in the 

appropriate manner.

(a) The complete basis for a recommendation involving statutory changes 

must be described.

(b) One or more alternatives to statutory change should be presented if 

possible. The alternative recommendations obviously will have a lesser 

ability to have the intended impact. The degree to which the full impact 

cannot be realized should be described.”

No such recommendations are made. The scope of the Act provides sufficient latitude to 

implement changes that improve the performance of the insurance for crops currently insured 

under Dollar Plan coverage, reduce the workload on RMA, and improve the actuarial basis of 

insurance coverage for these crops.

IV.B Recommendations Affecting Regulations

“Recommendations that affect regulations are those that involve a change to the 

Basic Provisions, the Crop Provisions, or any subparts at 7 CFR Part 400.

(a) The complete basis for a recommendation involving regulatory changes 

must be described.

(b) One or more alternatives to regulatory change should be presented if 

possible. The alternative recommendations obviously will have a lesser 

ability to have the intended impact. The degree to which the full impact 

cannot be realized should be described.”

Based on the totality of the information developed in this review, the Contractor believes the 

Dollar Plan model is not sustainable in the future. Lack of sufficient and reliable data for 

determining the RMDA, especially by season in the case of some crops and states, the allowable 

cost, and the minimum value contribute to this assessment.

In Section V, the Contractor presents seven alternatives to the modifications to the Dollar Plan

model. The majority of the options are based on existing crop insurance models. One is based 

on the authority under the Act to develop cost of production insurance and another is based on 

tweaks to the nursery model. Strengths and limitations of each are discussed. Please note: the 

alternatives are offered and considered for completeness; the Contractor recommends 

replacement of the dollar offerings considered with an individual plan based on established 

insurance models.

In the introduction to this Section IV, the Contractor provided options to modify the existing 

Dollar Plan to address certain deficiencies that were identified during the review. However, in 

the opinion of the Contractor, these are not sufficient to overcome the major failings of the 

model or to overcome the negative impressions some interested parties expressed during the 
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listening sessions. The Contractor was unable to determine a path to improvement that is 

sufficient to overcome all negative attributes of the plan. Accordingly, the Contractor examined 

alternative insurance models to identify a potential replacement.

The Contractor considered plans of insurance under the Area Risk Protection Insurance (ARPI) 

policy. These do not appear to be feasible for many of the same reasons that the Dollar Plan is 

not sustainable. In particular, there is a lack of sufficient and reliable unbiased third-party data 

for determining the area average yield or revenue on a seasonal basis.

The Contractor considered a cost of production plan of insurance as authorized under the Act. 

The Federal Crop Insurance Corporation (FCIC) Board of Directors already has determined that 

one effort to develop coverage on an individual basis was administratively cumbersome and 

placed burdens on producers due to the extremely detailed record-keeping entailed by such a 

plan. The Contractor also considered an area-based plan of coverage based on production costs. 

Although some published data regarding quantities of fertilizer and chemicals are available, 

along with annual prices, there still is a lack of detailed information regarding use and pricing of 

inputs such as labor, equipment, and energy. Another hindrance to this approach is data are not 

available on a seasonal basis.

The Contractor considered Margin Protection (MP) coverage as an alternative. In addition to the 

shortcomings of the cost of production alternative, there is insufficient information to measure 

the change in prices of the specified inputs that may occur.

The Contractor also considered a different plan of insurance loosely based on the Nursery 

insurance model. It depends on assessments of expected revenue by type, planting density, and 

other variables. Sufficient information to support this model is not available.

ARH has many desirable characteristics that lend it to serving as a replacement. Many of the 

attributes of APH coverage also extend to this insurance model. However, lack of Catastrophic 

Coverage (CAT) may not be well received by those producers who presently elect this choice. It 

may be possible to develop a hybrid plan that merges APH with the ARH component. The APH 

component could be restricted to the CAT level of coverage. This is not inconsistent with the 

general recommendation set forth below.

By a process of elimination, the only model consistent with the nature of the crops and that meets

the identified data needs to the greatest extent is the APH model. This alternative minimizes the 

need for developing information from external sources since the primary basis of the guarantee is 

based on producer supplied data. Producers certify that adequate records exist to substantiate the 

certified historical acreage and production. Records are subject to audit (7 CFR Part 400.53). 

Forms of adequate records for a crop are defined in the CIH.

Under APH, the guarantee is based on the approved yield calculated in accordance with 7 CFR 

Part 400 Subpart G. A loss exists whenever the production is less than the guarantee formed by 

the product of the approved yield and the coverage level. A price election determined by RMA 

monetizes the guarantee and the amount of production loss. Acreage and production data must 

be reported by type and practice. Practice includes the season of production. As noted at various 
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points in the discussion of this report, there are no third-party public sources of probable prices 

for a crop year for these crops. However, the APH plan has operated for many years for several 

field crops, fruit crops, and vegetable crops for which no third party public pricing information is 

available. APH is the presently established insurance plan for fresh market tomatoes in three 

northern counties of Florida and for fresh market beans in several counties located in three states 

along the eastern seaboard. A detailed evaluation of the performance of these programs is 

beyond the scope of this SOW. A high level overview shows the simple average loss ratio for 

fresh market tomatoes insured under the APH plan in Florida was 0.907 for the period 1989-

2015 and the dollar weighted loss ratio was 1.043. The difference between the two loss ratios

was primarily due to crop year 2012, when the loss ratio was 3.235. Fresh market green beans 

were insured under a Dollar Plan for 2000-2006; insurance was not offered for 2007-2010; and 

APH has been offered since 2011. The dollar weighted loss ratio for 2011-2015 is 0.682 and the 

simple average is slightly lower at 0.628.

The same basic rules of APH apply under ARH. The major difference is that historical records 

of total revenue must be reported by the producer in addition to acreage and production. Third 

party pricing data is not needed since the guarantee is based on the approved revenue, not the

product of approved yield and a price election. ARH is the presently offered insurance plan for 

sweet and sour cherries in several states and for oranges and strawberries in California. Insured 

acreage has been quite robust, especially for cherries. This is an indicator that producers are not 

averse to reporting revenue as the basis of insurance. However, as noted, lack of the CAT option 

may not be well perceived.

Either APH or ARH resolves the issues of data sufficiency and quality. Developing premium 

rates for either will require acquisition of data representative of the risks being insured. The 

required data are part of what is required to properly develop premium rates for a Dollar Plan. 

As was noted in the Evaluation Report, the increasing level of the RMDA relative to expected 

revenue negatively impacts the ability to use experience rating since the effective coverage level 

has been increasing over time.

This determination does not affect the Common Crop Insurance Policy Basic Provisions (the 

Basic Provisions). The Basic Provisions, as the name infers, contain generally applicable terms 

of the insurance contract. All the options discussed herein affect the Crop Provisions for the 

affected crops (fresh market sweet corn, fresh market peppers, and fresh market tomatoes). 

While the Crop Provisions for other crops also may be affected, the scope of this review was 

limited specifically to the named crops.

Since the Crop Provisions are codified at 7 CFR Part 400, those regulations necessarily are 

affected by the recommendation. Existing Crop Provisions and regulations must be cancelled 

and replaced. The only option the Contractor was able to identify as an alternative to regulatory 

action is to leave the existing Dollar Plan coverage in place. This requires no regulatory action 

since the insurance plans for the crops are permanent until revised through regulatory action.

IV.C Modifications Affecting Actuarial Documents

“Recommendations that affect actuarial documents are those that involve a 

change to the Special Provisions or the FCI-35 documents.
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(a) If changes are recommended, the complete basis for a recommendation 

involving changes to the actuarial documents must be described.

(b) Unlike changes that affect statute or regulation, no alternatives are 

required.”

The recommendations regarding either APH or ARH as the plan of insurance for these crops will 

require replacement of information presently contained within certain tabs of the actuarial 

documents shown in the Actuarial Information Browser. No changes in the fundamental format 

of the documents are needed. Affected tabs include Prices, Rates, and the Special Provisions. 

The changes are needed to accurately describe the coverage provided under the adopted 

approach and to provide accurate information for establishing the appropriate premium rate. The 

revised documents will convey the same information in the same format as presently conveyed 

for crops included under the APH plan.

IV.D Modifications Affecting Procedures

“Recommendations that affect procedures are those that involve a change to the 

CIH, the LAM, the crop LASH, or other handbooks and documents that 

convey information for administering the crop program.

(a) The complete basis for a recommendation involving changes to the 

specific handbooks and documents must be described.

(b) Unlike changes that affect statute or regulation, no alternatives are 

required.”

The primary changes to the CIH and Loss Adjustment Manual (LAM) will involve including the 

affected crops in the instructions for APH crops and deleting information about the affected 

crops from other sections of these documents. Changes to the Loss Adjustment Standards 

Handbook (LASH) involve modifications of the instructions for the Appraisal Worksheet and the 

Production Worksheet to convert the data presently presented in dollars to units of production. 

The units of production already are included as part of the information for the Appraisal 

Worksheet.

No additional handbooks or issuances are affected if APH is the chosen alternative. If ARH 

were to be accepted, separate Insurance Standards Handbooks will be needed since ARH is not 

considered to be a permanent program. Terms and conditions for pilot crops or insurance plans 

are not included in general issuances.
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V. ALTERNATIVE PLANS OF INSURANCE

The Contractor identified several areas within the current program in need of revision which 

cannot be effectively modified without creating or adopting a different insurance program 

altogether. In this section, the Contractor identifies seven alternative plans of insurance and 

discusses each.

Convert the Insurance Plan to Area Yield Protection or Area Revenue Protection (ARP)

These alternatives have advantages relative to the current Dollar Plan model. Since the amount 

of insurance is based on an area average, the actions of any producer have no discernable impact 

on the area average yield or the area average revenue. There is no individual loss adjustment, so 

no feed-back loop is needed to adjust guarantees. All producers who choose the same coverage 

level and protection factor have the same amount of insurance, similar to the coverage available 

under the Dollar Plan. All producers so situated will have the same amount of indemnity in the 

event the area average yield (Area Yield Protection), price, or combination thereof is below the 

value that triggers a loss.

There also are clear disadvantages to these alternatives. NASS production and price statistics 

have been published on a crop year basis in the past. For most states and crops, the crop year 

equates to the calendar year. All harvesting activity occurs during that calendar year. Beginning 

2012, the NASS statistics for vegetables are published on an annual basis.

The Crop Provisions for fresh market sweet corn, fresh market peppers, and fresh market 

tomatoes are established for a crop year that begins in southern Florida with fall season planting 

(earliest planting date is July 15 for sweet corn and August 10 for peppers and tomatoes) and 

extends until the end of insurance date the following calendar year (approximately mid-year in 

southern Florida). These dates do not coincide with the production statistics published by NASS.

In addition, NASS no longer publishes production statistics by planting season. All data are on 

an annual basis. Assume, for example, that a producer plants a winter season for one of these 

crops. The final planting date is in January of the crop year. Suppose a freeze occurs in midJanuary, destroying the crop. The amount of any indemnity for a crop cannot be determined 

until early in the following calendar year when the Vegetables Annual Summary is released by 

NASS. That publication will be based on the results reported for winter, spring, and fall seasons 

combined. Although the producer may plant only the one season, any indemnity is based on the 

entire year’s results. Hence, producers might have a complete loss but receive little or no 

indemnity because the remaining seasons might have results that fail to trigger an indemnity or 

that trigger a much smaller indemnity than warranted for the winter season loss. This situation 

likely will not be acceptable to affected producers.

In addition to these limitations, there is no source of unbiased third-party information regarding 

pricing. Establishing the price election or projected price will require methods such as those 

used for many, if not most, crops reinsured by FCIC. Since these are fresh market crops with no 

carryover stocks, an adequate estimator of the current season’s expected price likely can be 

found in an Olympic average of the five most recent crop years, the approach often used by FSA. 

This average, which eliminates the highest and the lowest price of the five observations, 

eliminates the effects of extremes that can occur with fresh market vegetables – oversupply 
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situations, natural disasters, etc. An alternative is the simple average of the last five years. Other 

crops that are currently insurable also do not have third-party pricing information available as a 

basis for the price election.

A final limitation of the data available to support an insurance program under ARPI pertains to 

the state-wide nature of the data. Fresh market tomatoes are insured under two plans in Florida: 

the Dollar Plan in the southern counties and the APH plan in three northern counties. A loss 

event may severely affect the southern counties (e.g., hurricane or freeze) but have limited effect 

on the northern counties. The state-wide results may not reflect the severity of the disaster to the 

affected producers.

In summary, conversion to an insurance plan under ARPI likely will necessitate a change in the 

crop year used by crop insurance for these crops, at least in Florida and in Georgia (fresh market 

sweet corn in selected counties). It also will require elimination of seasons since there will be no 

data to support estimation of seasonal guarantees and to determine indemnities. Producer 

acceptance of these changes would likely be very low.

Convert the Insurance Plan to Actual Production History (APH)

Introduction of APH supports the current crop year definitions and seasonal guarantees since it is 

based on the individual producer’s actual production as documented via the production report. 

This report requires the producer to certify there are acceptable records as defined in the CIH for 

each crop. For fresh vegetable crops, the majority is sold to or through brokers and other 

middlemen; hence, documentation is available. These are the same documents presently 

required to support a claim for indemnity.

Producer acceptance is a question regarding this model. It was available when Dollar Plans first 

were introduced, but producers did not voice acceptance of the model. A stated reason was that 

there was no desire to obtain high dollar amounts of coverage due to trepidation that such a 

model might attract competitors due to the perception of substantially reduced risk of financial 

losses. Producers supported an insurance plan based on production costs. The listening sessions 

demonstrated some interest now in alternatives to the perceived deficiencies of the Dollar Plans.

Another drawback of the APH plan is the lack of an unbiased third-party source of pricing 

information, the same as discussed above for Area Yield Coverage. The same alternatives for 

price discovery that were identified in that discussion also apply to this alternative.

Conform to RMA’s enabling legislation, and identify potential changes to regulations, and 

procedures;

The recommended action conforms to FCIC’s enabling legislation. Potential changes to 

regulations and procedures have been identified.

Be ratable and operable in an actuarially sound manner;

APH has been an established insurance plan since the middle 1980s. It has operated 

successfully for many crops including some fresh market vegetable crops. The data 

needed to develop an appropriate premium rate are well known and methods to develop a 

premium rate have been developed.
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Control or eliminate moral hazards;

The primary moral hazards that exist under APH are shifting of production among 

optional units and unreported sales. The Crop Provisions for these three crops allow a 

basic unit to be established by planting period. Since the fresh vegetables deteriorate 

rapidly, shifting production among seasons is deemed unlikely. Optional unit division by 

irrigated or non-irrigated practice cannot occur for these three crops in the study area 

since acreage must be irrigated to be insured. The Contractor does not believe the 

incentives for moral hazard will increase if the insurance plan is converted from Dollar to 

APH. A loss adjuster can evaluate the condition of the plants on one optional unit versus 

another to make an assessment as to whether any substantive difference in reported 

production per acre is warranted.

Not change market behavior or create market distortions that change or influence producer 

decisions to plant one crop over another; and

There are no reasons to assume that a crop with proper crop insurance guarantees and 

appropriate relative prices will change producers’ behavior with respect to planting. If 

there is concern, a restriction such as that contained in the Fresh Market Bean Crop 

Provisions can be imposed. That restriction limits the insurable acreage in any year to 

not greater than 110 percent of the acreage planted in any of the three previous crop 

years. If a greater number of acres are planted, the guarantee per acre is reduced 

proportionately. In other words, the total insurable production cannot exceed 110 percent 

of the approved yield multiplied by the maximum acres planted in any of the three most 

recent crop years. Acreage planted to each of the fresh market vegetable crops in Florida, 

the primary state included in this review, has been relatively stable from year to year but 

with a generally downward trend.

Be marketable (i.e., based on listening sessions with Dollar Plan crop producers, there must 

be an expectation of demand for the revised/new program).

There is dissatisfaction with the Dollar Plan as it exists. Lack of transparency with regard 

to the determination of the RMDA, minimum values, and other program parameters is a 

major issue with stakeholders. There are perceptions that participants are regarded as 

dishonest and are subject to frequent audits. There were statements that changes imposed 

by RMA have degraded the program significantly. No one voiced satisfaction with the 

status quo. There were expressions of support for individual insurance coverage such as 

APH or ARH.

Participation in the Dollar Plans has generally been declining, but with a shift in the mix 

of business with higher percentages of acres insured at CAT levels. While these 

characteristics do not signal overwhelming immediate acceptance of an APH plan of 

coverage, there are indications producers want a change. As referenced previously, this 

shift in participation is completely consistent with the incentives the Dollar Plan creates 

for an ever-degrading pool of insureds. A market readiness test using listening sessions 

to discuss this specific idea during any development effort will provide stronger 

indications of support for this particular solution.
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Convert the Insurance Plan to Actual Revenue History (ARH)

ARH functions substantially the same as APH but uses reported revenue per acre rather than 

reported production per acre to establish the insurance guarantee. The value of production to 

count is deducted from the insurance guarantee to determine if an indemnity is payable. Thus, it 

provides insurance protection for low market prices, reduced yield, or low quality. This 

insurance plan also is compatible with the current definition of the crop year since producers will 

report actual revenue and production by season for the defined crop year. The FCIC Board 

recently lifted a temporary moratorium on submission of new ARH plans following a 

comprehensive and favorable review of these relatively recently rolled out plans.

ARH requires that the production be sold at a reasonable price as determined by the loss adjuster. 

Reasonable price means, considering the quality of the product, the price received is 

representative of the price paid to similarly situated producers at the time of sale. It is similar to 

the term local market price as this term is used in several crop insurance policies.

The purpose of ARH is to indemnify the producer for monetary losses due to loss of yield or 

reduced price due to market conditions or quality issues. It differs from the Dollar Plans in this 

respect in that the Dollar Plans protect “...against declining value due to damage that causes a 

yield shortfall.”18 As discussed previously, while this is the stated goal of the protections 

afforded by the Dollar Plan, in reality, the Crop Provisions calculations support the opportunity 

for an indemnity payment when one or both of the reference prices is too low, even with no yield 

loss. Similarly, ARH does not require a yield shortfall as a condition of eligibility for an 

indemnity.

The Contractor notes the CAT level of coverage is not offered under ARH consistent with FCIC 

policy regarding availability of that coverage under revenue plans of insurance. Use of that level 

of coverage is relatively high under the Dollar Plan in the study area, though that may be 

associated with the perception on the part of many producers that the coverage under the Dollar 

Plan does not cover the risk they care about most. Consequently, producer acceptance of this 

alternative plan may be low.

Conform to RMA’s enabling legislation, and identify potential changes to regulations, and 

procedures;

The recommended action conforms to FCIC’s enabling legislation. Potential changes to 

regulations and procedures have been identified.

Be ratable and operable in an actuarially sound manner;

ARH has been offered since 2009. As noted earlier, the plan recently was subject to 

review. The review was favorable. The data needed to develop an appropriate premium 

rate are well known and methods to develop a premium rate have been developed. ARH 

is somewhat more data-intensive than is APH.

Control or eliminate moral hazards;

The primary moral hazards that exist under APH are shifting of production among 

optional units and unreported sales. The Crop Provisions for these three crops allow a 

 

18 Op. cit.
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basic unit to be established by planting period. Since the fresh vegetables deteriorate 

rapidly, shifting production among seasons is deemed unlikely. Optional unit division by 

irrigated or non-irrigated practice cannot occur for these three crops in the study area 

since acreage must be irrigated to be insured. The Contractor does not believe the 

incentives for moral hazard will increase if the insurance plan is converted from Dollar to 

ARH. A loss adjuster can evaluate the condition of the plants on one optional unit versus 

another to make an assessment as to whether any substantive difference in reported 

production or revenue per acre is warranted.

Not change market behavior or create market distortions that change or influence producer 

decisions to plant one crop over another; and

There are no reasons to assume that a crop with proper crop insurance guarantees and 

appropriate relative prices will change producers’ behavior with respect to planting. If 

there is concern, a restriction such as that contained in the Fresh Market Bean Crop 

Provisions can be imposed. That restriction limits the insurable acreage in any year to 

not greater than 110 percent of the acreage planted in any of the 3 previous crop years. If 

a greater number of acres are planted, the guarantee per acre is reduced proportionately. 

In other words, the total insurance guarantee cannot exceed 110 percent of the approved 

revenue multiplied by the maximum acres planted in any of the three most recent crop 

years. Acreage planted to each of the fresh market vegetable crops in Florida, the 

primary state included in this review, has been relatively stable from year to year but with 

a generally downward trend.

Be marketable (i.e., based on listening sessions with Dollar Plan crop producers, there must 

be an expectation of demand for the revised/new program).

There is dissatisfaction with the Dollar Plan as it exists. Lack of transparency with regard 

to the determination of the RMDA, minimum values, and other program parameters is a 

major issue with stakeholders. There are perceptions that participants are regarded as 

dishonest and are subject to frequent audits. There were statements that changes imposed 

by RMA have degraded the program significantly. No one voiced satisfaction with the 

status quo. There were expressions of support for individual insurance coverage such as 

APH or ARH.

Develop a Cost of Production Insurance Plan as Authorized by the Act

Since the underlying premise of the Dollar Plan of coverage was to provide protection of 

production costs in the event of the occurrence of a covered peril, the question naturally arises: 

why not address the matter directly by developing an insurance plan specifically intended to 

cover production costs? Such authority did not exist at the time the Dollar Plans first were 

developed, but has been established since that time. The Federal Crop Insurance Act (Act) now 

authorizes cost of production insurance plans in section 508(c)(5)(C)(iii): the expected market 

price “... in the case of cost of production or similar plans of insurance, shall be the projected 

price of producing the commodity, as determined by the Corporation...”

No cost of production insurance plan has ever been formalized and adopted by the FCIC. 

Research was funded by the FCIC in the early 2000s to support development of a cost of 

production insurance policy. At its meeting on October 16, 2003, the FCIC Board of Directors 
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voted to disapprove a submission that would have established a cost of production insurance 

policy for cotton. The Board cited a number of issues and concerns as reasons for disapproval 

(https://www.rma.usda.gov/fcic/2003/1009collinstatement.pdf). The Contractor is not aware of 

any subsequent submission to the Board or any contract let by RMA that would establish a cost 

of production policy.

The submission described in the preceding paragraph was intended to provide cost of production 

coverage on an individual producer basis. The complex record-keeping and reporting 

requirements and burden on producers to supply such information was one of the reasons cited 

by the FCIC Board for disapproval.

This leaves open the question as to whether a cost of production approach on an area basis might 

be feasible. Such a policy would establish a set of commonly used inputs for each crop and 

establish the cost using prevailing prices of those inputs. Projected cost per unit would be 

established based on the area average yield, quantities of identified inputs, and prevailing prices 

of those inputs. Actual yields (final area yield) would be determined and the actual cost per unit 

produced determined using the initially determined cost of production. Any increase in the cost 

per unit that exceeded the chosen deductible would result in an indemnity.

The plan described above suffers from the same limitations that exist for insurance plans under 

ARPI or for continuation of the Dollar Plans without change. Data to support the quantity of an 

input typically used by harvest season are not available. NASS does report annual quantities of 

chemicals used per acre and percent of acres treated with each chemical by crop by state in 

survey results for vegetables published every two years (from NASS Quickstats home page, 

select survey, environmental, vegetables, crop name). With regard to fertilizers, “Percentage 

acreage treated, number of applications, rates of application, and total amounts applied of the 

primary macronutrients nitrogen (N), phosphate (P2O5), and potash (K2O) as well as (since 

2005) the secondary macronutrient sulfur (S) ... are available intermittently for fruits and 

vegetables.”

19

NASS also reports annual average prices paid by producers for fertilizers and chemicals. For 

example, the webpage https://quickstats.nass.usda.gov/results/F76D51C6-ED84-3540-94EC0B698A7F6281 reports the annual national average price of Capstan 50% WP. Thus, it should 

be possible, for a selected base year, to determine the annual quantity of fertilizer and chemical 

inputs used by crop by state and value that quantity at the national average price.

While NASS data appear to exist for determining the variable cost associated with fertilizers and 

chemicals, the quantities of diesel fuel, labor, and electricity to plant the crop, maintain it 

(including irrigation), harvest it, and perform other miscellaneous activities are less available. 

Annual prices can be obtained at the national level from NASS Quickstats for some inputs (e.g., 

diesel, gasoline, LP gas). Data regarding labor have not been published by NASS for several 

years. Consequently, the task of developing an area-based crop of production plan appears 

formidable but not impossible. Moreover, even if constructing such a plan is possible, the 

precedent set by insuring cost of production without regard to current market forces would 

 

19 https://www.nass.usda.gov/Surveys/Guide_to_NASS_Surveys/Chemical_Use/, accessed September 2017.
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fundamentally break from the non-trade-distorting intent of the Federal crop insurance program 

as it has been implemented to date.

Develop a Margin Protection (MP) Insurance Plan

MP is an area-based plan of insurance based on the expected revenue (expected area yield x 

expected price) minus the estimated costs of production. In its simplest form, it measures change 

in the per-acre costs of producing a crop during a period of time when producers normally would 

purchase inputs for the crop year. A fixed basket of inputs is priced immediately prior to the 

sales closing date and again at a later time.

MP is more complex than would be an area-based cost of production plan because the prices of 

inputs must be determined on two or more distinct dates during the growing season. All the 

issues discussed under the area-based cost of production alternative exist with this alternative in 

addition to the complications of finding multiple prices during a growing season.

Develop an “Inventory” Style of Insurance Plan

This plan would incorporate some aspects of the Nursery Crop Insurance plan. Under this style 

of plan, the expected value of an acre of vegetable plants with a specified plant population would 

be established. The expected value equals the plant population x expected production per plant x 

expected price. Alternatively, it can be expressed as expected cartons per acre x expected price. 

Expected price can be estimated in the same manner as was discussed for the area plans or for 

APH. A loss exists when the number of cartons sold plus the number of cartons of appraised 

production is less than the guarantee, which equals expected cartons per acre x coverage level.

This approach is substantially similar to the existing Dollar Plans in that the guarantee is areabased and loss adjustment is individually based. This plan also would need some form of a 

feedback loop to better manage future guarantees.
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VI. QUANTITATIVE METRICS

The SOW requires the Contractor to include in this report:

“a quantitative metric (e.g. scores) to evaluate the extent to which each of the 

recommendations address the issues, vulnerabilities, and weaknesses identified in 

Section 2.1.1 of this SOW and the Evaluation Report. The quantitative evaluation 

of the recommendations shall be included in a table, with a supporting discussion 

providing an interpretation of the quantitative metric.”

Section 2.1.1 of the SOW deals with the significant problems with maintaining the existing 

Dollar Plan insurance for the crops evaluated in the study area. RMA identified specific issues 

primarily related to data availability in Section 2.1.1 of the SOW. The Contractor provided a 

comprehensive analysis of these issues as they affect the existing insurance in Deliverable 2. As 

noted previously, the impact of the data problems carries over into different elements of any 

modification of the existing insurance. Furthermore, the data issues affect development and 

maintenance of any modified insurance differently, depending on the nature of the modifications.

To assist the Government in determining its actions related to the insurance of fresh market corn, 

fresh market peppers, and fresh market tomatoes in the study area, the Contractor has developed 

a quantitative matrix that assigns a numeric value to data availability regarding cost of 

production, seasonal differences (e.g., in yield and price), and type differences. Furthermore, the 

matrix includes the Contractor’s assessment of the various impacts of these limitations on 

development and implementation of the modified insurance. Each category has been scored with 

values between 1 (no substantive issues) and 5 (issues so great that the change is likely to fail). 

The supporting discussion providing an interpretation of each of the metrics is provided below.

In the development, administration, and maintenance of a modification of the Dollar Plan 

insurance for fresh market corn, fresh market peppers, and fresh market tomatoes, extensive data 

are required for rating and underwriting. It is important to note, in the study area producers 

make decisions about varieties, planting seasons, and production practices which affect their 

revenues. Varietal differences are currently reflected in insurance types only for fresh market 

tomatoes. While currently the markets for fresh market sweet corn seem to ignore differences in 

bicolor, white, and yellow kernelled varieties, the same cannot be said for the differences 

between green bell peppers and the orange, red, and yellow varieties. There are substantial 

differences in the prices received for the more colorful varieties as compared to the green bell 

peppers.

The Contractor, in completing this requirement of the SOW, is assigning a quantitative value 

based on the research and evaluations that formed the basis of the first two deliverables. The 

Contractor’s experience with development and maintenance of crop insurance products 

influenced the assignment of a specific value to each cell of the matrix. While another analyst 

might assign a slightly different value, the relative values among the potential modifications 

considered should reflect the relative practicality of these alternatives.

Type Data Availability

This metric addresses the availability of data related to type. For the crops under review, this 

primarily affects development, administration, and maintenance of a modification of the Dollar 
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Plan insurance for fresh market tomatoes. In assigning a quantitative value for this metric, the 

Contractor has considered the utility of data including acreage planted, acreage harvested, yield, 

price, and revenue. The Contractor would assign an optimum score of 1 if sufficient data are 

currently available from an appropriate source and are anticipated to be maintained by that 

source using a consistent methodology. The Contractor would assign the lowest score of 5 if no 

data were currently available and if there were no mechanism that could reasonably be expected 

to provide the data for development, administration, and maintenance.

Seasonal Data Availability

This metric addresses the availability of data related to the season. For the crops under review, 

the harvest season affects prices received and yields. In addition there may be cost differences 

between similar crops planted and harvested in different seasons, although these differences are 

not well documented. Cost and price data would be used in the development, administration, and 

maintenance of modifications of the Dollar Plan insurance for the crops under review in the 

study area. In assigning a quantitative value for this metric, the Contractor has again considered 

the utility of data including acreage planted, acreage harvested, yield, price, and revenue. The 

Contractor would assign an optimum score of 1 if sufficient data are currently available from an 

appropriate source and are anticipated to be maintained by that source using a consistent 

methodology. The Contractor would assign the lowest score of 5 if no data were currently 

available and if there were no mechanism that could reasonably be expected to provide the data 

for development, administration, and maintenance.

Cost of Production Data Availability

This metric addresses the availability of data related to the cost of production. For the crops 

under review in the study area, as noted previously there may be cost of production differences 

between similar crops planted and harvested in different seasons and in different zones of a 

production area. However, these differences are not well documented. Cost of production data 

would be used in the development, administration, and maintenance of cost of production and 

Margin Protection modifications of the Dollar Plan insurance for the crops under review in the 

study area. The Contractor would assign an optimum score of 1 if sufficient data are currently 

available from an appropriate source and are anticipated to be maintained by that source using a 

consistent methodology. The Contractor would assign the lowest score of 5 if no data were 

currently available and if there were no mechanism that could reasonably be expected to provide 

the data for development, administration, and maintenance.

Changes to the Act

This metric addresses whether existing language in the Act would support development of the 

potential modification. The Contractor only assigned two values: 1 and 2. The Contractor 

assigned the optimum score if it appears no change to the language of the Act were required. 

The Contractor assigned a score of 2 if a legal determination would be required to establish if the 

existing language was sufficient to support the proposed modification (see the description of the 

inventory-based approach in the preceding section).

Complexity of Development

This metric addresses the anticipated difficulty in developing an actuarially sound modification 

of the Dollar Plan for the three crops in the study area. The Contractor would assign an optimum 
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score of 1 if there were no identified challenges to a development effort. The Contractor would 

assign a score of 5 if it appeared barriers to development were insurmountable.

Complexity of Transition

This metric addresses the anticipated difficulty in transitioning from the existing insurance to the 

modified product. This includes activities required of RMA, AIPs, and insureds. It reflects the 

efforts required to modify existing records to address the new product requirements. It considers 

the possibility that some producers who are currently uninsured may choose to insure under the 

new structure. The Contractor would assign an optimum score of 1 if there were no identified 

challenges to a transition. The Contractor would assign a score of 5 if it appeared barriers to 

transition were considered insurmountable.

Record Keeping Requirements

This metric addresses the requirements for record keeping. This includes activities required of 

RMA, AIPs, and insureds. It reflects the efforts required to maintain future records to address 

the new product requirements. The Contractor would assign an optimum score of 1 if there were 

no identified challenges to maintaining appropriate records. The Contractor has assigned a score 

of 5 where it appeared barriers to record keeping may be insurmountable.

Administrative Burden

This metric addresses the administrative burden required to support the new approach. This 

includes activities required of RMA and AIPs. It reflects the efforts required to underwrite, rate, 

and adjust losses. It considers training activities, potential field inspections related to 

underwriting requirements, and the challenges of loss adjustment. Since development, transition, 

and record keeping requirements are addressed separately, they are not included in this element 

of the analysis. The Contractor would assign an optimum score of 1 if the new approach 

introduced no new administrative responsibilities. The Contractor has assigned a score of 5 

where it appeared the administrative burden may be so great as to fashion the proposed 

modification unfeasible.

Recognizes Producer Ability

This metric addresses the extent to which the proposed product addresses the differences in 

producer skill and success. Insurance plans such as APH or ARH inherently recognize 

differences in yields and/or revenue per acre that result from the quality of management, soils, 

application of variable inputs, and other factors, that occur among producers; the Dollar Plan 

does not (all growers in the county are assigned the same reference values without regard to their 

own historical or expected production or revenues). The Contractor has assigned an optimum 

score of 1 if the proposed product recognizes most or all aspects of these difference (including 

differences in prices realized). The Contractor has assigned the lowest score of 5 when the 

product does not recognize these differences in any aspect of the proposed insurance.

Producer Acceptance

This metric addresses the Contractor’s expectation concerning acceptance of the proposed 

product by producers. It is the most subjective of the metrics in the matrix. The Contractor has 

based this judgement first on the producer input during the research effort and then on 

experience with insurance products similar to those proposed. The Contractor would assign an 
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optimum score of 1 if universal acceptance were anticipated. The Contractor has assigned the 

lowest score of 5 for products where substantial and widespread resistance to the proposed 

modifications is anticipated.

Table 1. Matrix of a Quantitative Metrics Regarding Potential Modifications of the Dollar 

Plan Insurance for Fresh Market Corn, Peppers, and Tomatoes in the Study Area

Modify Existing Insurance by 

Conversion to

Type Data AvailabilitySeasonal Data AvailabilityProduction Cost Data AvailabilityChanges to the ActComplexity of DevelopmentComplexity of TransitionRecord Keeping RequirementsAdministrative BurdenRecognizes Producer AbilityProducer AcceptanceTotal

Area Yield Protection 4 5 N/A 1 2 2 1 2 5 5 27

Area Revenue Protection 4 5 N/A 1 2 2 1 2 5 5 27

Actual Production History 3 3 N/A 1 2 3 3 3 2 2 22

Actual Revenue History 3 3 N/A 1 2 3 3 3 1 4 23

Cost of Production Insurance 4 4 4 1 4 2 1 4 5 4 33

Margin Protection Insurance 4 5 4 1 4 3 1 4 5 5 36

Inventory Insurance 4 4 N/A 2 3 4 3 5 3 4 32

Rankings are subjective, based on judgements that compare one plan against another in terms of 

the attribute being measured. The results show that APH and ARH are regarded as substantially 

the same in terms of the aggregate of these attributes. ARH would have had a higher score than 

APH if the attribute of producer acceptance was scored at 2 or higher. The lack of a CAT option 

for coverage was the motivating factor affecting this score. The concept advanced earlier – ARH 

with an APH option for CAT coverage – would overcome this perceived disadvantage. This 

alternative would be compatible with the Policy Acceptance and Storage System since specific 

parameters can be specified for edits. 
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VII. CONCLUSIONS

“If it is concluded that a new (or replacement) plan of insurance should be 

adopted for the crop, recommendations of sufficient detail to allow development 

shall be provided in this section.”

The current dollar-based plans evaluated in this study have been offered for an extended period. 

In that time, RMA and other Federal agencies have conducted a number of detailed reviews of 

the program and made adjustments to the offerings based on the findings of these studies. 

Despite the changes that have been made and sincere efforts to improve the dollar-based 

coverage to provide a reasonable and sustainable model for insuring fresh market crops, 

fundamental flaws in program design and function remain. There are a number of changes that 

are explored in this document and that can be implemented to marginally improve expected 

program performance, but none of these will fully address the fundamental flaws in the dollarbased program design. The Contractor recommends current dollar-based offers for fresh market 

tomatoes, fresh market corn, and fresh market peppers be converted to individual-based 

programs under the APH plan of insurance.

Critical Considerations: APH versus ARH

In the evaluation of alternative plans to replace the dollar-based plans for these crops, two 

candidates emerged and substantially more attractive than alternatives; the Actual Production 

History Plan and the Actual Revenue History Plan. The scores for the two plans were nearly 

identical. The Contractor is charged with making a single recommendation for a replacement 

plan and has recommended APH based primarily on three critical considerations:

1) APH is very simple, requires minimal data to maintain, and indeed it is already offered 

for tomatoes in Florida, 

2) ARH faced a firm moratorium on expansion imposed by the FCIC Board of Directors 

until as recently as September of 2017, and

3) APH is inherently set up to support a CAT offer, whereas there is no precedence for a 

CAT offer for ARH.

In the text of the report the Contractor explores the potential for offering a special designated 

CAT-only APH offer to accompany an ARH-based buy-up offer. If this were deemed viable by 

RMA (and USDA legal counsel), the ARH plan would outscore the APH approach because it 

includes coverage for a class of perils (price risk) that are important to growers and that APH 

excludes. There can be little question that growers who currently purchase buy-up dollar 

coverage would prefer an ARH-based design. The ARH plan is more complex to offer and 

administer than APH based on two primary differences; the consideration of an Expected 

Revenue Factor (used to adjust guarantees if there are known fundamental shifts in markets 

relative to the values contained in growers’ histories), and the need for collection of pricing 

information in the current year to settle claims (or to rely on a standard benchmark price if there 

is no sold production. Each of these attributes implies a need for data of the same sort that has 

proven difficult to obtain in support of Dollar Plans. If RMA is comfortable that it can:

1) Obtain sufficient data to broadly monitor market prices, 

2) Establish a proxy (potentially based on sales data collected from other growers in the 

same season) to value production for growers with no sales in the current insurance 

period, and
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3) Offer a form of CAT coverage in support of the ARH plans,

The Contractor’s recommendation would be revised to suggest ARH as the preferable 

replacement for Dollar Plans.

The APH plan of insurance (like Dollar-based plans) has existed for more than 30 years since its 

inception in the mid-1980s. Many improvements have been made in the intervening years. 

Protection is provided to many producers of many crops, including some fresh vegetable crops

under this plan of insurance. While producers have demonstrated overwhelming preference for 

Revenue Protection plans of insurance (i.e., with harvest price change protection), there simply is 

not a viable mechanism to set forward prices and measure price change for fresh vegetable crops.

APH coverage is already available in select Florida counties for tomatoes.

The fundamentals for creating an APH plan of insurance are known due to the familiarity of this 

insurance plan. Required are observations of actual yield outcomes, by season in the case of 

some crops, for as many years as can be obtained from as many producers as can be encouraged 

to provide the information. Since producers typically do not maintain records for the long term 

(or are reluctant to spend time digging through archives), some measure of a “typical” (i.e., 

average) yield is needed. Crops under this contract do have NASS reported data concerning 

acres planted and harvested, production, and revenue. However, since 2012, those data are not 

reported by season of harvest.

The industry for producing these vegetables is incredibly concentrated. For example, the 2012 

Census reports that 28 farms produced 97 percent of the fresh market sweet corn acres harvested 

in Florida that year. That Census also reports that 47 farms produced 97 percent of the harvested 

acres for fresh market tomatoes and 24 farms produced 93 percent of the harvested acres of fresh 

market peppers. Some of these farms might produce more than one of these crops. Hence, 

success in acquiring the data needed to develop appropriate premium rates depends on a high 

level of participation from among this small universe.

The crop insurance experience data available to RMA has limited utility for moving forward. 

The data reported in the Policy Acceptance and Storage System (PASS) records only the dollar 

amount of the guarantee and the dollar amount of the production to count. The quantity of 

production and the dollar value per unit of that production are not acquired. Detailed Harvested 

Production Worksheets that contain the quantity of production to count are maintained in 

producer’s insurance files in locations designated by the AIP. The Standard Reinsurance 

Agreement provides that records must be retained for three years after the last day the 

information contained in those records may be submitted through the automated systems 

(PASS). Hence, it is possible that records concerning the insurance under these Dollar Plans 

may be available for seven or eight years after the end of a crop year.

The goal of the information gathering would be to accumulate at least five, and preferably ten, 

years of production records from the majority of the farms that produce these crops. Once the 

data are accumulated, analysis of historical losses becomes possible. With sufficient 

information, econometric techniques can be applied to the data. In any event, quantitative

analysis of the information is possible.
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Appendix A

Summarized Statistical Data – Insurance Experience

Select Tables (Entire Appendix May Be Found in the 

Program Evaluation Report Final)
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Table A6. Insurance Experience: Fresh Market Peppers, By State for Evaluated States and Counties, 1998-2015

Year State

Policies 

Earning 

Premium

Acres Premium Liability Determined 

Acres Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

1998 Florida 59 7,833.20 2,833,648 19,772,348 1,400.60 2,620,149 0.9247 0.1325 0.1433

1999 Florida 58 9,346.50 3,357,350 22,895,928 2,113.90 4,012,342 1.1951 0.1752 0.1466

2000 Florida 49 8,387.60 3,336,665 22,894,198 1,772.20 3,749,383 1.1237 0.1638 0.1457

2001 Florida 66 10,571.30 5,440,692 34,617,726 1,336.00 1,901,208 0.3494 0.0549 0.1572

2002 Florida 69 9,934.60 5,202,560 33,681,374 3,675.10 8,386,766 1.6120 0.2490 0.1545

2003 Florida 96 11,914.80 6,009,283 39,521,462 4,773.80 11,136,354 1.8532 0.2818 0.1521

Georgia 1 25.00 9,174 66,625 - - 0.0000 0.0000 0.1377

2004 Florida 110 12,827.47 6,896,637 44,471,497 3,346.70 9,109,614 1.3209 0.2048 0.1551

Georgia 2 45.50 14,193 121,258 21.50 53,262 3.7527 0.4392 0.1170

2005 Florida 95 12,279.87 6,447,042 37,367,589 1,972.50 3,684,151 0.5714 0.0986 0.1725

Georgia 2 37.70 14,410 100,471 - - 0.0000 0.0000 0.1434

2006 Florida 94 12,168.30 5,372,843 32,220,093 2,366.75 4,933,075 0.9181 0.1531 0.1668

Georgia 2 40.00 13,309 154,040 20.00 10,719 0.8054 0.0696 0.0864

2007 Florida 84 8,364.80 5,747,575 29,622,106 1,178.35 2,095,873 0.3647 0.0708 0.1940

Georgia 2 22.00 8,351 89,298 - - 0.0000 0.0000 0.0935

2008 Florida 87 8,943.50 5,327,236 28,808,560 1,295.50 2,844,296 0.5339 0.0987 0.1849

Georgia 2 31.50 13,450 129,308 - - 0.0000 0.0000 0.1040

2009 Florida 79 9,560.32 5,022,519 28,911,936 728.90 1,658,020 0.3301 0.0573 0.1737

Georgia 2 43.40 19,426 180,674 - - 0.0000 0.0000 0.1075

2010 Florida 73 7,057.00 3,383,793 21,775,104 633.30 1,719,054 0.5080 0.0789 0.1554

Georgia 2 48.00 23,830 210,144 24.00 16,942 0.7110 0.0806 0.1134

2011 Florida 93 7,432.60 3,446,784 22,727,139 683.60 1,494,218 0.4335 0.0657 0.1517

Georgia 2 30.30 14,388 132,653 19.80 18,753 1.3034 0.1414 0.1085

2012 Florida 95 7,053.30 3,087,482 21,417,494 747.30 1,370,124 0.4438 0.0640 0.1442

Georgia 3 37.50 41,227 151,737 17.00 37,626 0.9127 0.2480 0.2717

2013 Florida 85 6,233.70 4,179,203 24,952,612 725.80 2,244,152 0.5370 0.0899 0.1675

Georgia 3 33.70 33,442 176,886 25.50 74,340 2.2230 0.4203 0.1891

2014 Florida 74 5,479.70 3,441,281 21,953,566 354.40 1,136,020 0.3301 0.0517 0.1568

Georgia 2 20.60 8,528 72,636 - - 0.0000 0.0000 0.1174

2015 Florida 77 5,423.90 1,914,602 17,888,882 997.00 2,710,006 1.4154 0.1515 0.1070

Georgia 1 10.50 4,474 40,751 - - 0.0000 0.0000 0.1098

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A7. Insurance Experience: Fresh Market Sweet Corn, By State for Evaluated States and Counties, 1998-2015

Year State

Policies 

Earning 

Premium

Acres Premium Liability Determined 

Acres Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

1998 Alabama 1 574.80 26,902 224,172 - - 0.0000 0.0000 0.1200

Florida 114 27,394.00 664,298 9,721,571 397.90 121,343 0.1827 0.0125 0.0683

Georgia 41 6,694.10 144,217 2,579,224 50.00 11,602 0.0804 0.0045 0.0559

1999 Alabama 1 572.00 26,770 223,080 - - 0.0000 0.0000 0.1200

Florida 96 25,376.70 869,364 10,324,269 900.80 268,838 0.3092 0.0260 0.0842

Georgia 55 13,013.50 314,233 3,928,642 745.70 273,223 0.8695 0.0695 0.0800

2000 Alabama 1 425.00 19,890 165,750 130.00 40,032 2.0127 0.2415 0.1200

Florida 105 25,637.80 886,782 12,019,560 1,979.30 909,861 1.0260 0.0757 0.0738

Georgia 71 15,805.70 345,396 4,429,727 817.30 336,728 0.9749 0.0760 0.0780

2001 Alabama 1 454.00 23,683 190,680 150.00 50,749 2.1428 0.2661 0.1242

Florida 118 27,459.60 1,405,778 15,121,012 4,372.50 2,147,491 1.5276 0.1420 0.0930

Georgia 83 15,853.10 434,995 5,095,572 2,137.80 739,698 1.7005 0.1452 0.0854

2002 Alabama 1 441.00 23,607 190,071 - - 0.0000 0.0000 0.1242

Florida 123 29,479.40 1,233,793 15,066,985 1,783.30 618,182 0.5010 0.0410 0.0819

Georgia 79 17,707.60 381,028 4,755,472 24.60 9,865 0.0259 0.0021 0.0801

2003 Alabama 1 485.80 26,426 212,780 326.80 108,253 4.0965 0.5088 0.1242

Florida 112 30,237.50 1,394,777 16,286,156 3,073.30 1,066,466 0.7646 0.0655 0.0856

Georgia 90 17,536.10 406,055 4,869,531 1,232.60 404,616 0.9965 0.0831 0.0834

2004 Alabama 1 554.00 51,032 246,532 500.00 180,080 3.5288 0.7305 0.2070

Florida 91 26,089.10 1,296,592 14,392,919 689.60 180,517 0.1392 0.0125 0.0901

Georgia 70 16,490.30 432,964 4,949,179 640.90 254,578 0.5880 0.0514 0.0875

2005 Florida 104 25,372.80 1,555,293 17,925,856 1,055.60 339,360 0.2182 0.0189 0.0868

Georgia 71 16,253.50 561,147 6,307,075 1,022.10 393,231 0.7008 0.0623 0.0890

2006 Florida 87 25,110.70 1,427,817 18,247,956 5,430.20 1,987,152 1.3917 0.1089 0.0782

Georgia 64 17,293.80 737,375 7,157,435 734.20 251,417 0.3410 0.0351 0.1030

2007 Florida 104 24,910.20 1,604,570 19,794,963 1,968.50 691,012 0.4307 0.0349 0.0811

Georgia 65 16,820.50 726,256 7,592,922 465.60 322,661 0.4443 0.0425 0.0956

2008 Florida 86 23,830.50 1,456,730 18,806,640 1,940.30 894,169 0.6138 0.0475 0.0775

Georgia 52 15,665.60 559,073 6,363,130 1,514.60 348,840 0.6240 0.0548 0.0879

2009 Florida 89 22,129.70 1,467,323 18,796,731 1,508.90 492,055 0.3353 0.0262 0.0781

Georgia 53 13,195.80 486,986 5,523,631 1,651.70 408,958 0.8398 0.0740 0.0882

2010 Alabama 1 536.10 76,223 306,115 136.10 77,714 1.0196 0.2539 0.2490

Florida 107 25,748.70 1,389,356 20,194,430 4,073.10 2,610,749 1.8791 0.1293 0.0688

Georgia 58 16,462.15 850,919 8,611,223 2,174.60 1,275,888 1.4994 0.1482 0.0988

2011 Alabama 1 439.10 63,044 253,800 - - 0.0000 0.0000 0.2484
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Year State

Policies 

Earning 

Premium

Acres Premium Liability Determined 

Acres Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

Florida 89 26,502.00 1,784,205 25,404,213 1,532.80 1,250,197 0.7007 0.0492 0.0702

Georgia 49 13,215.40 809,041 7,957,042 1,281.40 538,205 0.6652 0.0676 0.1017

2012 Alabama 1 559.80 82,319 331,400 99.00 56,313 0.6841 0.1699 0.2484

Florida 82 23,604.50 1,909,030 23,881,619 1,055.10 852,283 0.4464 0.0357 0.0799

Georgia 46 14,332.20 831,634 8,578,806 295.90 274,195 0.3297 0.0320 0.0969

2013 Alabama 1 591.70 103,914 418,333 300.70 203,879 1.9620 0.4874 0.2484

Florida 58 24,735.80 2,122,462 26,919,171 1,521.00 489,151 0.2305 0.0182 0.0788

Georgia 47 16,136.50 1,152,973 10,909,812 818.80 379,998 0.3296 0.0348 0.1057

2014 Alabama 1 499.70 93,467 376,275 287.80 204,468 2.1876 0.5434 0.2484

Florida 61 23,883.80 1,734,569 22,749,721 1,399.80 995,457 0.5739 0.0438 0.0762

Georgia 46 14,033.20 1,090,862 10,342,320 1,507.40 817,015 0.7490 0.0790 0.1055

2015 Alabama 1 400.00 76,210 306,800 173.80 133,304 1.7492 0.4345 0.2484

Florida 54 20,504.40 1,337,514 22,114,269 545.70 347,156 0.2596 0.0157 0.0605

Georgia 43 12,317.70 850,272 10,669,960 1,888.10 581,179 0.6835 0.0545 0.0797

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A8. Insurance Experience: Fresh Market Tomatoes, By State for Evaluated States and Counties, 1998-2015

Year State

Policies 

Earning 

Premium

Acres Premium Liability Determined 

Acres Indemnity Loss Ratio

Loss Cost 

Ratio

Earned 

Premium 

Rate

1998 Florida 124 21,587.40 4,582,412 44,728,947 836.10 1,332,654 0.2908 0.0298 0.1024

1999 Florida 130 24,964.60 4,960,899 50,564,970 1,999.50 2,961,655 0.5970 0.0586 0.0981

2000 Florida 130 26,196.80 5,680,463 53,974,974 2,732.90 5,213,082 0.9177 0.0966 0.1052

2001 Florida 138 28,013.60 6,118,250 61,476,278 2,181.40 3,262,615 0.5333 0.0531 0.0995

2002 Florida 179 29,210.20 6,257,742 65,274,332 2,417.94 3,140,523 0.5019 0.0481 0.0959

2003 Florida 166 26,238.92 6,368,530 62,389,830 2,622.90 3,229,336 0.5071 0.0518 0.1021

2004 Florida 168 26,990.20 5,883,137 61,603,008 1,892.70 2,970,233 0.5049 0.0482 0.0955

2005 Florida 149 25,269.59 8,234,689 75,542,446 2,673.40 3,744,538 0.4547 0.0496 0.1090

2006 Florida 166 27,132.22 8,756,485 80,116,813 5,498.80 10,803,594 1.2338 0.1348 0.1093

2007 Florida 166 25,198.90 11,434,800 94,099,673 7,598.70 17,359,744 1.5182 0.1845 0.1215

2008 Florida 141 24,466.73 10,300,230 87,281,640 388.50 1,222,436 0.1187 0.0140 0.1180

2009 Florida 156 26,878.59 15,076,195 103,961,239 9,902.49 23,777,468 1.5772 0.2287 0.1450

2010 Florida 133 24,818.03 9,638,839 82,204,166 5,424.40 12,873,724 1.3356 0.1566 0.1173

2011 Florida 149 24,913.90 13,150,043 105,015,381 6,665.80 16,534,644 1.2574 0.1574 0.1252

2012 Florida 153 24,002.50 16,458,350 129,618,936 15,676.10 54,595,054 3.3172 0.4212 0.1270

2013 Florida 260 23,539.00 19,981,132 145,036,008 5,004.90 11,546,541 0.5779 0.0796 0.1378

2014 Florida 242 23,550.10 13,600,037 113,213,478 3,223.50 6,896,649 0.5071 0.0609 0.1201

2015 Florida 216 18,027.60 8,205,663 80,530,138 2,498.40 5,121,304 0.6241 0.0636 0.1019

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A14. Insurance Experience: Fresh Market Peppers, National for Evaluated States and Counties, Insurance Option VA, 

VB, and VO, 1998-2015

Year

Policies 

Earning 

Premium

Acres Premium Liability Determined Acres Indemnity Loss Ratio Loss Cost 

Ratio

Earned 

Premium 

Rate

1998 34 6,391.70 2,686,736 17,458,162 1,373.80 2,561,079 0.9532 0.1467 0.1539

1999 38 6,044.20 3,082,931 18,190,414 2,113.90 4,012,342 1.3015 0.2206 0.1695

2000 31 6,036.50 3,093,848 19,343,552 1,772.20 3,749,383 1.2119 0.1938 0.1599

2001 40 8,225.10 5,148,018 30,494,483 1,320.60 1,885,854 0.3663 0.0618 0.1688

2002 49 7,699.30 4,922,571 29,435,613 3,675.10 8,386,766 1.7037 0.2849 0.1672

2003 68 8,682.60 5,612,207 34,114,215 4,710.40 10,938,523 1.9491 0.3206 0.1645

2004 80 10,078.68 6,496,783 39,278,581 3,368.20 9,162,876 1.4104 0.2333 0.1654

2005 62 8,486.77 5,988,643 31,242,006 1,957.70 3,662,679 0.6116 0.1172 0.1917

2006 50 5,000.30 4,430,773 20,000,274 2,131.25 4,404,837 0.9941 0.2202 0.2215

2007 60 5,594.20 5,118,929 23,066,684 1,178.35 2,095,873 0.4094 0.0909 0.2219

2008 52 5,130.00 4,568,657 20,517,294 1,264.00 2,807,028 0.6144 0.1368 0.2227

2009 44 4,420.72 4,089,971 18,138,338 711.20 1,651,878 0.4039 0.0911 0.2255

2010 37 2,959.80 2,732,302 12,674,934 605.50 1,704,334 0.6238 0.1345 0.2156

2011 49 3,063.00 2,682,180 13,573,287 683.60 1,494,218 0.5571 0.1101 0.1976

2012 55 3,300.00 2,500,211 13,657,947 764.30 1,407,750 0.5631 0.1031 0.1831

2013 59 3,846.00 3,765,319 19,656,452 725.80 2,244,152 0.5960 0.1142 0.1916

2014 50 3,238.10 3,050,989 16,792,970 354.40 1,136,020 0.3723 0.0676 0.1817

2015 51 2,507.00 1,708,311 11,467,895 997.00 2,710,006 1.5864 0.2363 0.1490

Total 909 100,703.97 71,679,379 389,103,101 29,707.30 66,015,598 0.9210 0.1697 0.1842

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A15. Insurance Experience: Fresh Market Sweet Corn, National for Evaluated States and Counties, Insurance Option 

VA, VB, and VO, 1998-2015

Year

Policies 

Earning 

Premium

Acres Premium Liability Determined Acres Indemnity Loss Ratio Loss Cost 

Ratio

Earned 

Premium 

Rate

1998 2 513.80 19,300 205,520 - - 0.0000 0.0000 0.0939

1999 10 1,142.80 106,828 686,423 478.20 147,797 1.3835 0.2153 0.1556

2000 3 146.40 6,456 62,160 - - 0.0000 0.0000 0.1039

2001 9 2,976.40 306,247 1,872,232 1,334.90 331,631 1.0829 0.1771 0.1636

2002 11 2,169.40 222,342 1,708,664 1,248.70 516,369 2.3224 0.3022 0.1301

2003 10 2,483.00 272,707 1,965,646 2,044.60 769,460 2.8216 0.3915 0.1387

2004 15 3,237.40 453,714 2,804,845 956.60 328,112 0.7232 0.1170 0.1618

2005 14 2,153.50 451,670 2,554,113 670.10 242,375 0.5366 0.0949 0.1768

2006 10 3,216.60 507,942 2,779,125 336.90 163,259 0.3214 0.0587 0.1828

2007 12 3,864.20 686,839 4,023,790 407.80 276,373 0.4024 0.0687 0.1707

2008 6 2,056.00 457,912 2,508,087 1,408.70 724,350 1.5819 0.2888 0.1826

2009 6 1,724.80 411,257 2,242,449 553.80 232,476 0.5653 0.1037 0.1834

2010 12 4,853.30 718,873 4,479,368 2,191.00 1,135,276 1.5792 0.2534 0.1605

2011 14 5,694.00 935,111 6,600,628 1,219.90 544,356 0.5821 0.0825 0.1417

2012 19 6,585.10 1,236,654 8,652,620 490.60 388,702 0.3143 0.0449 0.1429

2013 17 7,424.80 1,394,473 9,520,812 955.00 429,158 0.3078 0.0451 0.1465

2014 19 6,026.70 1,194,819 8,059,262 2,453.50 1,440,881 1.2059 0.1788 0.1483

2015 14 5,611.70 903,319 7,686,842 2,341.70 836,617 0.9262 0.1088 0.1175

Total 203 61,879.90 10,286,463 68,412,586 19,092.00 8,507,192 0.8270 0.1244 0.1504

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A16. Insurance Experience: Fresh Market Tomatoes, National for Evaluated States and Counties, Insurance Option 

VA, VB, and VO, 1998-2015

Year

Policies 

Earning 

Premium

Acres Premium Liability Determined Acres Indemnity Loss Ratio Loss Cost 

Ratio

Earned 

Premium 

Rate

1998 61 10,745.90 3,340,285 27,424,911 796.10 1,254,274 0.3755 0.0457 0.1218

1999 56 9,469.30 3,366,525 26,071,982 1,248.50 2,309,261 0.6859 0.0886 0.1291

2000 71 11,468.50 4,144,239 32,008,140 2,568.90 5,094,274 1.2292 0.1592 0.1295

2001 77 10,062.90 4,054,233 30,410,285 1,839.30 2,339,459 0.5770 0.0769 0.1333

2002 109 12,757.80 4,463,578 38,509,963 2,302.44 2,943,696 0.6595 0.0764 0.1159

2003 98 12,797.42 4,751,566 39,466,005 2,525.90 3,114,207 0.6554 0.0789 0.1204

2004 100 12,496.70 4,485,682 39,172,992 1,640.60 2,698,844 0.6017 0.0689 0.1145

2005 93 15,685.80 7,074,065 57,833,854 2,642.30 3,674,221 0.5194 0.0635 0.1223

2006 95 14,684.97 7,296,731 56,918,395 5,167.60 10,545,187 1.4452 0.1853 0.1282

2007 123 17,182.30 9,889,384 72,026,740 7,515.80 17,292,206 1.7486 0.2401 0.1373

2008 110 14,928.53 8,632,978 64,161,388 388.50 1,222,436 0.1416 0.0191 0.1346

2009 130 18,690.29 13,641,631 83,283,915 9,843.49 23,752,983 1.7412 0.2852 0.1638

2010 82 9,491.70 6,627,470 41,601,022 4,694.90 11,607,379 1.7514 0.2790 0.1593

2011 120 16,817.10 12,031,491 87,317,066 6,665.80 16,534,644 1.3743 0.1894 0.1378

2012 127 17,619.60 15,409,747 112,694,640 15,668.10 54,588,615 3.5425 0.4844 0.1367

2013 203 18,216.90 19,068,295 129,884,952 5,004.90 11,546,541 0.6055 0.0889 0.1468

2014 152 11,284.40 11,558,328 77,537,284 3,223.50 6,896,649 0.5967 0.0889 0.1491

2015 139 8,936.10 7,459,865 55,401,234 2,498.40 5,121,304 0.6865 0.0924 0.1347

Total 1,946 243,336.21 147,296,093 1,071,724,768 76,235.03 182,536,180 1.2392 0.1703 0.1374

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A42. Insurance Experience: All Insurance Options: Fresh Market Peppers Policies Indemnified by State; 1998-2015

Year State Policies 

Indemnified

Insured 

Acres

Determined 

Acres Premium Liability Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

1998 Florida 9 7,833.20 1,400.60 2,833,648 19,772,348 2,620,149 0.9247 0.1325 0.1433

1999 Florida 12 9,346.50 2,113.90 3,357,350 22,895,928 4,012,342 1.1951 0.1752 0.1466

2000 Florida 7 8,387.60 1,772.20 3,336,665 22,894,198 3,749,383 1.1237 0.1638 0.1457

2001 Florida 12 10,571.30 1,336.00 5,440,692 34,617,726 1,901,208 0.3494 0.0549 0.1572

2002 Florida 30 9,934.60 3,675.10 5,202,560 33,681,374 8,386,766 1.6120 0.2490 0.1545

2003 Florida 53 11,914.80 4,773.80 6,009,283 39,521,462 11,136,354 1.8532 0.2818 0.1521

Georgia - 25.00 - 9,174 66,625 - 0.0000 0.0000 0.1377

2004 Florida 46 12,827.47 3,346.70 6,896,637 44,471,497 9,109,614 1.3209 0.2048 0.1551

Georgia 1 45.50 21.50 14,193 121,258 53,262 3.7527 0.4392 0.1170

2005 Florida 27 12,279.87 1,972.50 6,447,042 37,367,589 3,684,151 0.5714 0.0986 0.1725

Georgia - 37.70 - 14,410 100,471 - 0.0000 0.0000 0.1434

2006 Florida 26 12,168.30 2,366.75 5,372,843 32,220,093 4,933,075 0.9181 0.1531 0.1668

Georgia 1 40.00 20.00 13,309 154,040 10,719 0.8054 0.0696 0.0864

2007 Florida 16 8,364.80 1,178.35 5,747,575 29,622,106 2,095,873 0.3647 0.0708 0.1940

Georgia - 22.00 - 8,351 89,298 - 0.0000 0.0000 0.0935

2008 Florida 17 8,943.50 1,295.50 5,327,236 28,808,560 2,844,296 0.5339 0.0987 0.1849

Georgia - 31.50 - 13,450 129,308 - 0.0000 0.0000 0.1040

2009 Florida 15 9,560.32 728.90 5,022,519 28,911,936 1,658,020 0.3301 0.0573 0.1737

Georgia - 43.40 - 19,426 180,674 - 0.0000 0.0000 0.1075

2010 Florida 17 7,029 606 3,361,480 21,653,396 1,704,334 0.5070 0.0787 0.1552

Georgia 1 48 24 23,830 210,144 16,942 0.7110 0.0806 0.1134

2011 Florida 17 7,432.60 683.60 3,446,784 22,727,139 1,494,218 0.4335 0.0657 0.1517

Georgia 1 30.30 19.80 14,388 132,653 18,753 1.3034 0.1414 0.1085

2012 Florida 17 7,053 747 3,087,482 21,417,494 1,370,124 0.4438 0.0640 0.1442

Georgia 1 38 17 41,227 151,737 37,626 0.9127 0.2480 0.2717

2013 Florida 23 6,233.70 725.80 4,179,203 24,952,612 2,244,152 0.5370 0.0899 0.1675

Georgia 2 33.70 25.50 33,442 176,886 74,340 2.2230 0.4203 0.1891

2014 Florida 11 5,480 354 3,441,281 21,953,566 1,136,020 0.3301 0.0517 0.1568

Georgia - 21 - 8,528 72,636 - 0.0000 0.0000 0.1174

2015 Florida 31 5,423.90 997.00 1,914,602 17,888,882 2,710,006 1.4154 0.1515 0.1070

Georgia - 10.50 - 4,474 40,751 - 0.0000 0.0000 0.1098

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A43. Insurance Experience: All Insurance Options: Fresh Market Sweet Corn Policies Indemnified by State; 1998-2015

Year State Policies 

Indemnified

Insured 

Acres

Determined 

Acres Premium Liability Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

1998 Alabama - 574.80 - 26,902 224,172 - 0.0000 0.0000 0.1200

Florida 6 27,394.00 397.90 664,298 9,721,571 121,343 0.1827 0.0125 0.0683

Georgia 1 6,694.10 50.00 144,217 2,579,224 11,602 0.0804 0.0045 0.0559

1999 Alabama - 572.00 - 26,770 223,080 - 0.0000 0.0000 0.1200

Florida 14 25,376.70 900.80 869,364 10,324,269 268,838 0.3092 0.0260 0.0842

Georgia 4 13,013.50 745.70 314,233 3,928,642 273,223 0.8695 0.0695 0.0800

2000 Alabama 1 425.00 130.00 19,890 165,750 40,032 2.0127 0.2415 0.1200

Florida 32 25,637.80 1,979.30 886,782 12,019,560 909,861 1.0260 0.0757 0.0738

Georgia 2 15,805.70 817.30 345,396 4,429,727 336,728 0.9749 0.0760 0.0780

2001 Alabama 1 454.00 150.00 23,683 190,680 50,749 2.1428 0.2661 0.1242

Florida 39 27,459.60 4,372.50 1,405,778 15,121,012 2,147,491 1.5276 0.1420 0.0930

Georgia 9 15,853.10 2,137.80 434,995 5,095,572 739,698 1.7005 0.1452 0.0854

2002 Alabama - 441.00 - 23,607 190,071 - 0.0000 0.0000 0.1242

Florida 17 29,479.40 1,783.30 1,233,793 15,066,985 618,182 0.5010 0.0410 0.0819

Georgia 1 17,707.60 24.60 381,028 4,755,472 9,865 0.0259 0.0021 0.0801

2003 Alabama 1 485.80 326.80 26,426 212,780 108,253 4.0965 0.5088 0.1242

Florida 19 30,237.50 3,073.30 1,394,777 16,286,156 1,066,466 0.7646 0.0655 0.0856

Georgia 14 17,536.10 1,232.60 406,055 4,869,531 404,616 0.9965 0.0831 0.0834

2004 Alabama 1 554 500 51,032 246,532 180,080 3.5288 0.7305 0.2070

Florida 5 26,089 690 1,296,592 14,392,919 180,517 0.1392 0.0125 0.0901

Georgia 3 16,490 641 432,964 4,949,179 254,578 0.5880 0.0514 0.0875

2005 Florida 20 25,373 1,056 1,555,293 17,925,856 339,360 0.2182 0.0189 0.0868

Georgia 11 16,254 1,022 561,147 6,307,075 393,231 0.7008 0.0623 0.0890

2006 Florida 57 25,111 5,430 1,427,817 18,247,956 1,987,152 1.3917 0.1089 0.0782

Georgia 5 17,294 734 737,375 7,157,435 251,417 0.3410 0.0351 0.1030

2007 Florida 29 24,910 1,969 1,604,570 19,794,963 691,012 0.4307 0.0349 0.0811

Georgia 4 16,821 466 726,256 7,592,922 322,661 0.4443 0.0425 0.0956

2008 Florida 15 23,831 1,940 1,456,730 18,806,640 894,169 0.6138 0.0475 0.0775

Georgia 7 15,666 1,515 559,073 6,363,130 348,840 0.6240 0.0548 0.0879

2009 Florida 14 22,130 1,509 1,467,323 18,796,731 492,055 0.3353 0.0262 0.0781

Georgia 13 13,196 1,652 486,986 5,523,631 408,958 0.8398 0.0740 0.0882

2010 Alabama 1 536.10 136.10 76,223 306,115 77,714 1.0196 0.2539 0.2490

Florida 26 25,748.70 4,073.10 1,389,356 20,194,430 2,610,749 1.8791 0.1293 0.0688

Georgia 10 16,462.15 2,174.60 850,919 8,611,223 1,275,888 1.4994 0.1482 0.0988

2011 Alabama - 439 - 63,044 253,800 - 0.0000 0.0000 0.2484
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Year State Policies 

Indemnified

Insured 

Acres

Determined 

Acres Premium Liability Indemnity Loss Ratio Loss Cost Ratio

Earned 

Premium 

Rate

Florida 25 26,502 1,533 1,784,205 25,404,213 1,250,197 0.7007 0.0492 0.0702

Georgia 8 13,215 1,281 809,041 7,957,042 538,205 0.6652 0.0676 0.1017

2012 Alabama 1 559.80 99.00 82,319 331,400 56,313 0.6841 0.1699 0.2484

Florida 16 23,604.50 1,055.10 1,909,030 23,881,619 852,283 0.4464 0.0357 0.0799

Georgia 5 14,332.20 295.90 831,634 8,578,806 274,195 0.3297 0.0320 0.0969

2013 Alabama 1 592 301 103,914 418,333 203,879 1.9620 0.4874 0.2484

Florida 13 24,736 1,521 2,122,462 26,919,171 489,151 0.2305 0.0182 0.0788

Georgia 6 16,137 819 1,152,973 10,909,812 379,998 0.3296 0.0348 0.1057

2014 Alabama 1 499.70 287.80 93,467 376,275 204,468 2.1876 0.5434 0.2484

Florida 11 23,883.80 1,399.80 1,734,569 22,749,721 995,457 0.5739 0.0438 0.0762

Georgia 5 14,033.20 1,507.40 1,090,862 10,342,320 817,015 0.7490 0.0790 0.1055

2015 Alabama 1 400.00 173.80 76,210 306,800 133,304 1.7492 0.4345 0.2484

Florida 7 20,504.40 545.70 1,337,514 22,114,269 347,156 0.2596 0.0157 0.0605

Georgia 5 12,317.70 1,888.10 850,272 10,669,960 581,179 0.6835 0.0545 0.0797

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A44. Insurance Experience: All Insurance Options: Fresh Market Tomatoes Policies Indemnified by State; 1998-2015

Year State Policies 

Indemnified

Insured 

Acres

Determined 

Acres Premium Liability Indemnity Loss Ratio

Loss Cost 

Ratio

Earned 

Premium 

Rate

1998 Florida 10 21,587.40 836.10 4,582,412 44,728,947 1,332,654 0.2908 0.0298 0.1024

1999 Florida 17 24,964.60 1,999.50 4,960,899 50,564,970 2,961,655 0.5970 0.0586 0.0981

2000 Florida 15 26,196.80 2,732.90 5,680,463 53,974,974 5,213,082 0.9177 0.0966 0.1052

2001 Florida 21 28,013.60 2,181.40 6,118,250 61,476,278 3,262,615 0.5333 0.0531 0.0995

2002 Florida 27 29,210.20 2,417.94 6,257,742 65,274,332 3,140,523 0.5019 0.0481 0.0959

2003 Florida 28 26,238.92 2,622.90 6,368,530 62,389,830 3,229,336 0.5071 0.0518 0.1021

2004 Florida 27 26,990.20 1,892.70 5,883,137 61,603,008 2,970,233 0.5049 0.0482 0.0955

2005 Florida 28 25,269.59 2,673.40 8,234,689 75,542,446 3,744,538 0.4547 0.0496 0.1090

2006 Florida 48 27,132.22 5,498.80 8,756,485 80,116,813 10,803,594 1.2338 0.1348 0.1093

2007 Florida 59 25,198.90 7,598.70 11,434,800 94,099,673 17,359,744 1.5182 0.1845 0.1215

2008 Florida 10 24,466.73 388.50 10,300,230 87,281,640 1,222,436 0.1187 0.0140 0.1180

2009 Florida 76 26,878.59 9,902.49 15,076,195 103,961,239 23,777,468 1.5772 0.2287 0.1450

2010 Florida 49 24,753.03 5,424.40 9,607,110 81,914,721 12,873,724 1.3400 0.1572 0.1173

2011 Florida 56 24,913.90 6,665.80 13,150,043 105,015,381 16,534,644 1.2574 0.1574 0.1252

2012 Florida 107 24,002.50 15,676.10 16,458,350 129,618,936 54,595,054 3.3172 0.4212 0.1270

2013 Florida 79 23,539.00 5,004.90 19,981,132 145,036,008 11,546,541 0.5779 0.0796 0.1378

2014 Florida 54 23,550.10 3,223.50 13,600,037 113,213,478 6,896,649 0.5071 0.0609 0.1201

2015 Florida 48 18,027.60 2,498.40 8,205,663 80,530,138 5,121,304 0.6241 0.0636 0.1019

Source: Table developed by the Contractor based on data provided by RMA and/or other USDA sources.
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Table A102. Insurance Experience: Fresh Market Peppers All Options, Percent Crop Value Insured by State, 1998-2015

Year State Planted Acres \1 Value \1 Insured Acres \2

Insured Liability 

\2

Percent Acres

(Insured Acres/Planted Acres)

Percent Liability

(Insured Liability / 

Value)

1998 Florida 19,400 $275,441,200 7,833.20 $19,772,348 0.40 0.07

1999 Florida 19,000 $210,938,000 9,346.50 $22,895,928 0.49 0.11

2000 Florida 19,000 $251,712,000 8,387.60 $22,894,198 0.44 0.09

2001 Florida 16,000 $189,888,000 10,571.30 $34,617,726 0.66 0.18

2002 Florida 17,600 $181,632,000 9,934.60 $33,681,374 0.56 0.19

2003 Florida 17,800 $178,925,600 11,914.80 $39,521,462 0.67 0.22

2004 Florida 18,500 $220,797,500 12,872.97 $44,592,755 0.70 0.20

2005 Florida 19,400 $216,969,600 12,317.57 $37,468,060 0.63 0.17

2006 Florida 19,800 $224,601,300 12,208.30 $32,374,133 0.62 0.14

2007 Florida 19,500 $185,152,500 8,386.80 $29,711,404 0.43 0.16

2008 Florida 19,000 $270,256,000 8,975.00 $28,937,868 0.47 0.11

2009 Florida 16,900 $183,424,150 9,603.72 $29,092,610 0.57 0.16

2010 Florida 15,700 $262,158,600 7,077.20 $21,863,540 0.45 0.08

2011 Florida 14,100 $198,457,500 7,462.90 $22,859,792 0.53 0.12

Source: \1 After NASS Quick Stats https://quickstats.nass.usda.gov/ accessed April 2017.

\2 After RMA Insurance Data
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Table A103. Insurance Experience: Fresh Market Sweet Corn All Options, Percent Crop Value Insured by State, 1998-2015

Year State Planted Acres \1 Value \1

Insured Acres 

\2

Insured Liability 

\2

Percent Acres

(Insured Acres/Planted 

Acres)

Percent Liability

(Insured Liability / 

Value)

1998 Alabama 2,300 $976,000 574.80 $224,172 0.25 0.23

Florida 41,600 $104,607,600 27,394.00 $9,721,571 0.66 0.09

Georgia 19,000 $34,830,000 6,694.10 $2,579,224 0.35 0.07

1999 Alabama 2,400 $1,885,000 572.00 $223,080 0.24 0.12

Florida 39,200 $105,840,000 25,376.70 $10,324,269 0.65 0.10

Georgia 22,000 $52,920,000 13,013.50 $3,928,642 0.59 0.07

2000 Alabama 2,300 $1,233,000 425.00 $165,750 0.18 0.13

Florida 40,900 $102,102,000 25,637.80 $12,019,560 0.63 0.12

Georgia 23,000 $42,000,000 15,805.70 $4,429,727 0.69 0.11

2001 Alabama 2,200 $2,393,600 454.00 $190,680 0.21 0.08

Florida 40,200 $117,262,600 27,459.60 $15,121,012 0.68 0.13

Georgia 25,500 $47,450,000 15,853.10 $5,095,572 0.62 0.11

2002 Alabama 2,500 $2,652,000 441.00 $190,071 0.18 0.07

Florida 41,600 $100,531,200 29,479.40 $15,066,985 0.71 0.15

Georgia 26,000 $43,750,000 17,707.60 $4,755,472 0.68 0.11

2003 Alabama 2,500 $2,150,000 485.80 $212,780 0.19 0.10

Florida 39,400 $90,016,000 30,237.50 $16,286,156 0.77 0.18

Georgia 26,000 $46,200,000 17,536.10 $4,869,531 0.67 0.11

2004 Alabama 2,600 $1,513,200 554.00 $246,532 0.21 0.16

Florida 38,900 $110,381,600 26,089.10 $14,392,919 0.67 0.13

Georgia 28,000 $46,656,000 16,490.30 $4,949,179 0.59 0.11

2005 Alabama 2,200 $1,152,000 0.00 0.00

Florida 35,100 $108,057,600 25,372.80 $17,925,856 0.72 0.17

Georgia 30,000 $79,387,500 16,253.50 $6,307,075 0.54 0.08

2006 Alabama 2,200 $761,600 0.00 0.00

Florida 33,000 $117,270,600 25,110.70 $18,247,956 0.76 0.16

Georgia 27,000 $58,916,000 17,293.80 $7,157,435 0.64 0.12

2007 Alabama 2,200 $750,200 0.00 0.00

Florida 40,000 $149,175,000 24,910.20 $19,794,963 0.62 0.13

Georgia 27,000 $54,687,500 16,820.50 $7,592,922 0.62 0.14

2008 Alabama 1,900 $1,121,000 0.00 0.00

Florida 45,300 $158,592,000 23,830.50 $18,806,640 0.53 0.12

Georgia 25,000 $81,719,000 15,665.60 $6,363,130 0.63 0.08

2009 Alabama 2,000 $2,220,000 0.00 0.00

Florida 45,200 $218,722,000 22,129.70 $18,796,731 0.49 0.09
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Year State Planted Acres \1 Value \1

Insured Acres 

\2

Insured Liability 

\2

Percent Acres

(Insured Acres/Planted 

Acres)

Percent Liability

(Insured Liability / 

Value)

Georgia 26,000 $85,150,000 13,195.80 $5,523,631 0.51 0.06

2010 Alabama 1,800 $2,006,000 536.10 $306,115 0.30 0.15

Florida 43,900 $183,804,600 25,748.70 $20,194,430 0.59 0.11

Georgia 24,900 $56,178,800 16,462.15 $8,611,223 0.66 0.15

2011 Alabama 1,700 $1,943,000 439.10 $253,800 0.26 0.13

Florida 44,500 $153,495,000 26,502.00 $25,404,213 0.60 0.17

Georgia 23,800 $54,502,000 13,215.40 $7,957,042 0.56 0.15

Source: \1 After NASS Quick Stats https://quickstats.nass.usda.gov/ accessed April 2017.

\2 After RMA Insurance Data
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Table A104. Insurance Experience: Fresh Market Tomatoes All Options, Percent Crop Value Insured by State, 1998-2015

Year State Planted Acres \1 Value \1 Insured Acres \2

Insured Liability 

\2

Percent Acres

(Insured Acres/Planted Acres)

Percent Liability

(Insured Liability / 

Value)

1998 Florida 39,300 $13,952,037 21,587.40 $44,728,947 0.55 3.21

1999 Florida 45,200 $15,820,026 24,964.60 $50,564,970 0.55 3.20

2000 Florida 39,400 $15,760,031 26,196.80 $53,974,974 0.66 3.42

2001 Florida 44,500 $14,908,032 28,013.60 $61,476,278 0.63 4.12

2002 Florida 43,200 $13,975,038 29,210.20 $65,274,332 0.68 4.67

2003 Florida 43,300 $14,190,039 26,238.92 $62,389,830 0.61 4.40

2004 Florida 42,400 $15,120,033 26,990.20 $61,603,008 0.64 4.07

2005 Florida 45,200 $15,540,052 25,269.59 $75,542,446 0.56 4.86

2006 Florida 41,200 $13,475,041 27,132.22 $80,116,813 0.66 5.95

2007 Florida 38,200 $13,321,032 25,198.90 $94,099,673 0.66 7.06

2008 Florida 32,400 $10,458,060 24,466.73 $87,281,640 0.76 8.35

2009 Florida 34,600 $12,298,042 26,878.59 $103,961,239 0.78 8.45

2010 Florida 32,000 $8,555,073 24,753.03 $81,914,721 0.77 9.57

2011 Florida 30,000 $9,120,055 24,913.90 $105,015,381 0.83 11.51

Source: \1 After NASS Quick Stats https://quickstats.nass.usda.gov/ accessed April 2017.

\2 After RMA Insurance Data
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Appendix B

Stakeholder Comments
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Dollar Plan

Listening Session Comments by Topic

Note: (i) – Insurance Industry Representative

(p) – Producer

Knowledge of the Program

 I'm not sure if the RMA has looked at the guidelines for adjusters; I know a lot of their 

procedures are really open for interpretation by the AIP, and it's not clearly black and 

white, and the problems that growers have experienced with the policy - many of those 

problems result in the way that the company interprets how the adjusters are supposed to 

interpret those guidelines. (i)

 Potential production seems to be one of the items open to the most interpreting. (i)

 I think it’s a good plan, myself. I've always wondered if you could make a Dollar PlanAPH hybrid plan. (i)

Use of the Program – Why or Why not?

 When there was a zero minimum value - we’re going back to the dollar plan. When you 

had that, guys were actually using that as a market protection. (p)

 I don't know how it all plays out in the actuarial world and the factors for the premiums 

and all, but it seems like to me there's too much emphasis or concern on the cost. The 

grower is selecting a dollar amount he wants to insure anyway. I don't think it makes a 

difference if the RMA says it costs $10,000/acre to grow tomatoes, or $8k/ac, it's all the 

grower selecting the amount of premium he wants to pay to cover x amount per acre on 

this plan, and he's trying to insure a percentage of his growing cost, so if he has a disaster, 

he's not totally out. There's no way growers are making money on this policy. But, they 

are using it to limit their risk. (i)

 I don't really see a problem with it in the way it's written (concerning stages). I've been 

selling crop insurance since 1991, and I only remember seeing one claim that was paid 

before a final stage and that was because of a total freeze. (i)

 The ones that use the plan effectively have found it satisfactory, but changing the MVO, 

especially on the peppers, has soured some people; the changes in cultural practices to the 

higher density stuff...I don't have a whole lot of feedback on the tomato stuff - they 

either like it or they don't. The big guys, they've got their own thing going on anyway. (i)

 Whether this works for smaller growers, I don't feel that's an effective program, whereas 

the whole farm might be. If they switched to fiscal year filing, which is an option, but I 

don't know many people that are willing to do that. They have it set up one way for their 
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taxes, which doesn't jive with their insurance, so if we could harmonize that I think we'd 

have more buy-in. (i)

 Some corn growers say that coverage was too high and guarantee was too low. The 

insurance was expensive but the coverage was too cheap. (i)

Does Program Address Industry Needs?

 I think the plan serves a purpose. I think the original plan served a better purpose, when 

the grower could elect to, in exchange for an increased premium, have a true zero 

minimum value, which has been taken away now; it covers most of the perils that are a 

threat to the grower that would wipe out a yield. (i)

 I don’t see how you’re going to make it work unless you steal, falsify records, or lie and 

cheat. Nothing makes any sense to me, and this whole farm revenue, that would be nice, 

but you have to wait till next year to get your money – that may work for you beans and 

corn and all out west, you know, where they have that winter chop, you know where 

they’ve got nothing in the ground...(p)

 Part of your problem is, too, you’ve got grades and sizes. Beans are beans, corn is corn; 

you’ve got 5/6’s, 6/6’s, 6/7’s, no 1’s, you got color, they’re all priced differently. (p)

 Every carton of tomato that is going out can be valued at a different price depending on 

the sizes and the color. I don’t think the market bulletin takes all that into consideration 

either. (p)

 I remember sitting in meetings with RMA from years ago...the federal crop days... and 

you used to get in a room....they stayed in tune with what was going on in the State of 

Florida. (i)

 I don't want to throw blame anywhere, but how a claim gets handled has so much to do 

with the adjuster, and if that adjuster doesn't know what he's doing, and doesn't work the 

claim correctly, it can be significant. (i)

 Well it was very interesting that they reduced the allowable cost. I don't know why that 

they reduced it because every time there's a claim paid, the grower has to document what 

the actual cost is to the adjuster and it's always greater than the allowable cost, so why 

did they reduce it? (i)

 Stakeholders expressed concern that the review would inevitably result in “...further 

erosion of the usefulness of the dollar plans.” (i)

 The program had been changed several times in recent years and that these changes, 

while not entirely without justification, had made the program substantially less attractive 

for tomato and pepper growers. (p)
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 The current program offers far less protection than the previous offer, and I have concern 

that the program will only likely to be further altered to reduce indemnities. (p)

Program Impacts

 That’s where I got so frustrated...we needed the insurance to be working and helping us, 

you know, this crop that is hurt and damaged severely, is going to be worth more to us in 

the ground if we can bring it out, than it is to put in a new plant....cause you had Charlie 

on the west coast that year, and you knew you’d have a good market in the fall season, 

but if you pull it out and replant, you just changed your timeline. (p)

 There's a notice for disease filed, because of the inability to control whitefly, we knew it 

was going to cause a disease problem, but at harvest when they're all green, it's not 

evident. It's a risk that currently is not addressed in the policy because they changed the 

minimum value, because they didn't want to insure against low markets. (i)

 Loan collateralization using the crop insurance product obviously is a standard practice, 

but they've (banks) noticed that as we've messed up these policies that they are no longer 

at full value collateralized. (i)

 It seems to me the specialty crop regions like FL are basically the tail of the dog being 

wagged hard by the Midwest, which is obviously where all of the major crop insurance is 

sold....so what we get varies dramatically....we're hostage to corn prices, so citrus, 

nursery, tomato, all of those things are subject to the vagaries of corn and soy. (i)

 We always have that discussion in our meetings; that we are insuring the market, and 

everybody says we're not, but we are, indirectly. (i)

 The current picking and packing allowance is $3.35/acre. RMA lowered our allowance 

cost by 20% and increased our coverage cost by 5%. So we are paying more for less 

coverage. (p)

Appropriateness to Industry

 If you’re going to have effective insurance to help us, you need an 85% level. (p)

 How is the grower supposed to get any of this appraised production to market when it 

doesn't make grade? They're going to throw the whole box out. So they're being charged 

with this production to count, but yet the USDA has proven by this inspection that they 

wouldn't make grade. So, if they brought all of this to the packing house and packed it, 

so it couldn't be marketed, but yet they are interpreting the policy that they have to 

appraise at for production to count. I don't think that's right. (i)
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 An agent noted that the long term actuarial performance of the dollar plans has been 

“generally pretty good,” and that he is frustrated that the program changes have all been 

made to the detriment of the efficacy of the program. “If it ain’t broke, why do they keep 

fixing it? And why do all the fixes just make it worse for growers?” The agent believes 

that the program is workable and functioning as intended in its current form; “When there 

is a bad year, growers get indemnities. Isn’t that what crop insurance is supposed to do?” 

(i)

 Bankers are requiring us to have crop insurance so we buy this plan even though the 

coverage is not adequate. (p)

 COP budgets do not take into consideration some of the basic input costs we are subject 

to every year. Our cost to produce an acre of tomatoes runs between $11,000 and 

$12,000, Dollar Plan allows $9,000. My cost to package a box of tomatoes is $4.53. The 

Dollar Plan MVO allows $3.55, so if I make a claim for loss, I start the process at a $0.98 

a box loss. I’ve used this insurance for 15 years and in some of those years the only thing 

that kept me in business was the insurance. Now, I may go out of business even with the 

insurance because it doesn’t cover the losses I would incur. (p)

 Different types of tomatoes are harvested and graded differently so costs vary greatly 

between types. Roma tomatoes are harvested once, then graded. Low graded fruit is 

gassed then graded again. Cherry and Grape tomatoes, on the other hand are harvested 

every day. Harvest costs for these types can be as much as 15 times higher than for 

round tomatoes. (p)

 In my estimation, under the current plan, the potential indemnity doesn’t even cover the 

cost of the premium to purchase the insurance. (p)

Suggested Improvements

 Do I have a number that sticks in my mind that’s appropriate for MVO? Zero. I’m 

already paying extra premium for the buy-up. Why should we be penalized? We’re 

already losing money, why should they take more away from us? (p)

 If you had an insurance policy that used revenue – just like this dollar plan...if somehow 

you could meld that...that’s what would help a farmer. (p) 

 Stages - I’d like to see it done away with and go 100% the day you plant. (p)

 Rather than documenting their production based on how many times their growers picked 

it, it should really be based on yield. All growers have that information; the grower can 

tell the adjuster what the yield was on that first pick. The number of times it's been 

picked really shouldn't make a difference. (i)
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 Yeah, if there was more of a gross revenue policy that would apply to large growers, I'm 

sure there would be interest. (i)

 There used to be a 30 day grace period for planting inspection, now it’s 5. So there’s an 

immediate need.

 In the policy it says the crop must be harvested 3 times. These new hybrids....they are 

done at 2. The percentage on replant is at 50%. That needs to be triggered somewhere 

between 15-20%.

 Under current market conditions it is critical that coverage offers not be permitted to 

lapse while a new program is brought on line. (p)

 Wind should be a risk covered by the insurance and it currently is not. (p)

 The coverage period is too short. It only covers 125 days. Spring planting to first harvest 

is 90 to 100 days, first picking is 114 days, second picking 128 days, third picking 138 

days. Coverage should last for 140 days. (p)

Other Programs more Appropriate?

 I’d like to have the whole farm revenue this year, because it looks like...I didn’t qualify 

anyway, but if we had a true revenue program that could be tailored to each area, where 

at the end of the deal, June 1 you did your books, what you were gonna file with your tax 

return for that year, I mean you could do it ahead of time with an auditor or accountant, 

and, then, that would be a big help. (p)

 That’s why I go back to a revenue based policy makes so much more sense for me as a 

farmer. Because then I can make the decisions that I need to make without trying to 

tailor the insurance to try to maximize the crop, which is only gonna mean less insurance 

money I have to collect. (p)

 The timing of the whole farm (revenue protection) does not work for us. (p)

Other Issues

 Do I trust the AMS reported prices? No, I don’t. Because too many of the people now 

are playing contract games with that price, you know, they’ll want a quote...say they 

have a 9 or 10 dollar contract and they’ve got trigger points, and the trigger’s 15, they’re 

gonna want to keep quoting that 15 so they can get a higher, you know 16, so they can 

get a higher number, if you have a trigger built in, even when the market is headed to 10, 

11, 12, they’ll quote that as long as they can to have that high quote out there to hold the 

ups in their contract, cause once they come below that , then you got to go to your 

contract number. (p)
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 It (imports) affects every commodity in this state...the strawberry guys got slaughtered, 

guys down in Mexico – you’ve got a strawberry grower down there, went from 14,000 

acres to 25,000 acres in 5 years – that’s a two thousand acre per year increase. You got 

farmers down there telling everybody he’s going from 74 acres to 500 acres of peppers. 

These guys aren’t in the produce business; these guys are in the drug business. We need 

volume control at the border, we need to regulate what’s coming over, how much is 

coming, and every truck that’s coming across that border needs to be inspected – not run 

through a scanner to check for masses, bodies, or such – every truck needs to have a dog 

in it. These guys aren’t in the produce business – they’re in the drug business. (p)

 There’s no way, as Steve says, that they can expand like that. Because their costs are the 

same as ours, except for labor. Labor is 10, 12, 15 dollars a day, but less productive, too, 

than our labor. But still, that’s a big advantage. They’ve got more shipping to get to the 

border...so how do you do that? Now they have a lot of contracts, they went out when 

NAFTA opened up and the scoured the country and went to these retailers. (p)

 They (Mexico) figured out how to grow in different elevations; they actually brought 

Israeli growers over...it’s our problem right now, but it’s fixing to be the whole county’s 

problem, because they’re learning how to grow year round, in different elevations to get 

into cooler weather in the summer. (p)

 Anymore, I mean...I’ll make the statement – it’s very hard to see it rain in Del Ray or 

Martin county from the office window in Valdosta. If you’re not participating in paying 

attention to what the state is going through, you’re going to doubt everything...because 

they look, and go...here’s data mining...they look and they go ‘well, we have 10 cat 

policies in FL, and nobody had a loss, but we have 50 buy up policies, all different ranges 

of coverage, and of those 50, ten growers that bought the 70 or 75% coverage, have a 

claim’. And they go, ‘nobody else did’. So you’re suspect because you bought 70 or 75, 

and you had a claim. (i)

 I agree they need to be concerned about the food supply – especially American food, 

where we’re so head to head with Mexico – Mexico is a year round competitor. They 

just really hammer the winter deal, but they should be intrusive, if we were offered this 

type of plan, they should send in auditors that are not just yes men; that have some actual 

skill and know our industry, to audit us and hold people’s feet to the fire, and penalize the 

bums and crooks. (p)

 (Concerning AMS price reports) You know how they get their data - they call up a 

salesman, ‘hey what's the price today?’ There's nothing magical about what he's telling 

them. The only thing that their reports are beneficial for is the movement; you can see 

the movement coming in from Mexico. (i)

 I think that a big thing for tomatoes and peppers is that a lot of growers have gone out of 

business. (i)
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 Heat can be a problem. If it is 100 degrees, they might not be able to gather it up fast

enough if they have a lot of acres. The heat is very hard on them and they might just have 

to plow it up. (i)

 Probably one of the biggest costs of production issues right now is the Food Safety Act. 

They have to hire people to do everything for it. You have to document everything that is 

done in the field, spraying, people, bathroom, sanitation in the field. You get audited 

every year. You have to have all the documentation to show that you are following 

everything. (i)

 Imports are killing our industry. Mexican tomatoes were selling at our local market for 

$2.53 a pound. (p)

 Labor is not cheap. We pay $12 - $15 per hour. We also have to hire two full time 

employees just to keep us in compliance with federal, state, and local employment 

regulations. (p)