November 1, 2017
Federal Crop Insurance for Specialty Crops
The current and previous farm bills—the Agricultural Act
Figure 1. Share of Fruit and Tree Nut Acres Insured
of 2014 (P.L. 113-79) and the Food, Conservation, and
Energy Act of 2008 (P.L. 110-246)—enhanced the federal
crop insurance program by expanding its scope and
broadening policy coverage for specialty crops.
Historically, the federal crop insurance program has
covered primarily traditional field crops such as wheat,
corn, and soybeans. In recent decades, the program has
been expanded so that policies are now available for a wide
range of commodities, including specialty crops. Despite
this expansion of the federal program, coverage for
specialty crops remains below that for traditional crops.
Specialty crops refers to “fruits and vegetables, tree nuts,
dried fruits, and horticulture and nursery crops (including

floriculture)” (7 U.S.C. 1621). This definition covers an
estimated 400 agricultural commodities, including fresh and
Figure 2. Share of Vegetable and Melon Acres Insured
processed fruits and vegetables, tree nuts (which excludes
peanuts), a range of nursery plants (trees, shrubs, flowering
plants), herbs and spices, coffee and tea, and also honey and
maple syrup, according to U.S. Department of Agriculture
(USDA) guidelines.
Other farm bill changes also benefit specialty crop growers.
These include expanded Whole-Farm Revenue Protection
(WFRP) insurance, enhanced assistance crops with no
individual policy coverage, and permanent authorization of
supplemental disaster assistance programs.
Federal Crop Insurance Coverage
The federal crop insurance program provides farmers with

risk management tools to address crop yield and/or revenue
Source: CRS from FCIC-reported data, April 2015. Data for dry
losses on their farms. Under the program, farmers can
peas are reported to be more than 100%.
purchase subsidized policies that pay an indemnity when
Specialty crops account for a small but growing share of the
their production or revenue falls below a guaranteed level.
federal crop insurance program. RMA data indicate that
The federal crop insurance program is permanently
liabilities for specialty crops (excluding apiaries) totaled
authorized by the Federal Crop Insurance Act, as amended
$16.2 billion, or about 16% of the total liability for all
(7 U.S.C. 1501 et seq.). USDA’s Risk Management Agency
federally insured crops. In 2000, the sector’s share of total
(RMA) operates the Federal Crop Insurance Corporation
crop insurance liabilities totaled less than $8 billion.
(FCIC), which is the funding mechanism for the program.
Specialty crops accounted for an estimated $561 million in
Insurance policies are sold and completely serviced through
total crop insurance premium subsidies received in 2015, or
approved private insurance companies. The insurance
about 9% of total subsidies paid that year. The average
companies’ losses are reinsured by USDA, and their
premium subsidy paid by the federal government in 2015
administrative and operating costs are reimbursed by the
was 64% for specialty crops. Actual premium subsidies
federal government.
paid, however, ranged from about 50% (tree nuts, melons)
In purchasing a crop insurance policy, a producer selects a
to 90% or greater (potatoes, citrus, banana trees).
level of coverage (i.e., deductible) and pays a portion of the
RMA reports that the number of acres covered by federal
premium—or none of it in the case of catastrophic
crop insurance totaled 296 million acres for the 2015 crop
coverage—which increases as the level of coverage rises.
year. Of this, the number of specialty crop acres totaled 8.6
The federal government pays the rest of the premium (62%,
million acres, or about 3% of total acres covered. Vegetable
on average, in 2015). Premium subsidies received by all
and melon acres covered by federal crop insurance totaled
U.S. agricultural producers totaled $6.1 billion in 2015.
nearly 4 million insured acres while fruit, tree nut, and
Total insurance protection (liability) for all federally
tropical crop acres accounted for the remainder. USDA
insured crops (excluding livestock) was $101.4 billion in
does not report acreage coverage for nursery crops.
2015. (This total excludes liabilities under WFRP.)
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link to page 1 link to page 1 Federal Crop Insurance for Specialty Crops
According to RMA, federal crop insurance covered roughly
these states range from about 50% to 70%, with up to 90%
73% of USDA-reported specialty crop acreage. This
participation in Florida.
compares to an estimated 85% of planted acreage for major
field crops covered by federal crop insurance. (USDA data
Whole-Farm Revenue Protection
is available for a subset of 38 specialty crops.) Market
The 2014 farm bill required RMA to provide a whole-
penetration, however, often varies widely by the type of
farm crop insurance policy option to producers and
crop. For fruits and tree nuts, the share of federally insured
authorized higher premium subsidy levels for whole-
acres ranges from less than 1% (strawberries) to nearly 90%
farm policies over other policy types. The WFRP pilot
(plums/prunes) (Figure 1). For vegetables and melons,
policy was first offered in 2015. It insures 50% to 85%
insured acres range from 5% of total acres (e.g., fresh
of revenue for all commodities on a farm under one
beans, sweet potatoes) to more than 80% of acres (e.g., dry
insurance policy, including (but not limited to) farms
peas, potatoes, citrus) (Figure 2).
with specialty or organic commodities that lack
individual policy coverage or those marketing to local,
Although many specialty crops are eligible for crop
regional, farm-identity preserved, specialty, or direct
insurance, coverage is still unavailable for some crops.
markets. Tax returns determine the historical revenue
Specialty crops that do not have access to federal crop
guarantee and revenue for the insured crop year.
insurance include asparagus, beets, broccoli, carrots (fresh
Participation is low but has increased significantly in
and for processing), cashews, cauliflower, celery, chives,
the last two years.
dates, eggplants, garlic, hazelnuts, leeks, lettuce, some
melons, spinach and other leafy greens, squash, and most
RMA estimates there were about 1,100 WFRP policies
root crops. Some crops may be covered by other types of
receiving premium subsidies in 2015, rising to nearly
insurance coverage, such as plans based on historical farm
2,700 policies in 2017. Premium subsidies totaled more
income (e.g., whole farm insurance programs).
than $100 million in in 2017. Total liability is estimated
at $2.8 billion in 2017, up from $1.1 billion in 2015.
Specialty crops are defined in statute as “fruits and
The average premium subsidy rate paid by the federal
vegetables, tree nuts, dried fruits, and horticulture and
government was about 70% (2015-2017).
nursery crops (including floriculture)” (7 U.S.C. 1621).
WFRP is currently available in all counties nationwide
as a stand-alone policy or in combination with other
Many of the new crop insurance products introduced each
policies. WFRP does not offer catastrophic (CAT) level
year are intended to broaden coverage of fruits, vegetables,
coverage (high deductible, 100% premium subsidy) and
and tree nuts. The number of insurance products covering
cannot be combined with CAT level policies.
specialty crops has increased in recent years.
Alternative Options to Crop Insurance
Still, specialty crop growers face a number of challenges
The 2014 farm bill also enhanced financial assistance to
pertaining to expanding insurance coverage, including
producers of noninsured crops (or crops with no current
generally small acreages, multiple crop varieties and
individual policy coverage, including some specialty crops)
farming practices (which contribute to greater complexity
and also permanently authorized supplemental disaster
and cost), quality and price discovery issues, grower
assistance programs benefitting specialty crops.
interest, non-weather risks, and other coverage limitations.
In some cases, USDA has reportedly not pursued policies
In lieu of available federal crop insurance for some
for particular commodities because producers have
specialty crops, the Noninsured Crop Disaster Assistance
expressed concerns that offering insurance could adversely
Program (NAP) provides an alternative option for
affect the market (i.e., because an insurance policy reduces
producers. NAP provides financial assistance to producers
producer risk, farmers may plant more acreage, which could
of noninsured crops when low yields, loss of inventory, or
drive down prices and total crop revenue). This has been a
prevented planting occur due to natural disasters. Specialty
concern for specialty crop growers and explains in part
crops currently eligible for NAP include mushrooms,
lower levels of insured acreage compared with other crops.
flowers, ornamental nursery crops, Christmas trees,
turfgrass sod, and ginseng.
Federal crop insurance policies for specialty crops (and
other crops as well) are generally either yield-based or
Two supplemental agricultural disaster assistance
revenue-based. For most yield-based policies, a producer
programs also provide assistance to orchard crops and
can receive an indemnity if there is a yield loss relative to
beekeepers for certain losses. The Tree Assistance
the farmer’s “normal” (historical) yield. Insurable causes of
Program (TAP) provides payments to qualifying
loss include drought, excess precipitation, hail, frost, freeze,
orchardists and nursery tree growers to replant or
fire (if due to natural causes), and insects and disease.
rehabilitate trees, bushes, and vines damaged by natural
Revenue-based policies protect against crop revenue loss
disasters. The Emergency Assistance for Livestock,
resulting from declines in yield, price, or both. Nursery crop
Honeybees, and Farm-Raised Fish Program (ELAP)
producers can be protected against plant damage or losses
provides assistance to beekeepers and other types of
in value due to adverse weather, failure of irrigation water
producers.
systems, fire, and wildlife.
Renée Johnson, Specialist in Agricultural Policy
Participation is greatest in the leading specialty crop
Isabel Rosa, Analyst in Agricultural Policy
producing states, such as California, Washington, Florida,
Michigan New York, and Oregon. Participation rates in
IF10765
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Federal Crop Insurance for Specialty Crops


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