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How does Avocado Crop Insurance Work? | Golden Pacific Crop Insurance


Growing Avocado in California can be challenging
and risky. Letís look at how Federal Multi-Peril Crop Insurance or (MPCI)
can help secure your operations bottom line.
This program is developed & reinsured by the USDA Risk Management Agency.
RMA in turn approves private insurers to issue policies, adjust claims and pay
losses to the grower. To make it easier for you, thereís no differences in coverage
or premium between carriers. In California, several specialty fruit & nut
crops can be insured for yield losses, specifically for Avocado, three varieties
are insurable: Hass, Lamb Hass and Gem.
The policy helps should you suffer crop yield losses due to damage from natural
causes such as freeze, hail, excess heat, high winds, insects, or wildlife.
The Actual Production History or (APH) crop policy is based on your actual past
production history of #1 and #2 grade fruit. Cull fruit are not counted.
Trees at least 6 years old or which have produced at least 2,000 pounds per acre
are insurable. Farmers wishing to buy a policy, must do so
before the sales closing date of November 30th.
The grower can select coverage levels beginning at 50% and up to 75% of their
approved historical average production. How does it work?
Jessica & her dad farm 10 acres of organic avocados in Fallbrook. With the help of
Domenic, their crop insurance professional, they decide to insure 60% percent of
the groves past yield history. The groves average past production is 8,000
pounds per acre. Regrettably, the orchard suffers a crop loss
due to extreme summer heat when the fruit is developing.
Jessica notifies Domenic her agent within 72 hours of the event happening.
The carrier sends their adjuster to inspect the damage.
The harvested crop was only 1,000 pounds of fruit per acre.
Since their APH was 8,000# per acre, at 60% coverage thatís a guarantee of 4,800
pounds per acre. The 4,800 pound guarantee minus the actual
production of 1,000 pounds leaves a deficiency of 3,800 pounds per acre.
The RMA obtains statewide crop value data from the California Avocado
Commission, and in turn determines the insured value of the crop is $1.30 per
pound. 3,800 pounds multiplied by $1.30/lb. multiplied
by 10 acres equals a total payable loss of $ 49,400.
This helps Jessica & Bob to cover the fixed costs invested in their crop and keeping
their family farm going. Federal crop insurance is partially subsidized
and backed by the USDA to keep rates affordable. The farmer pays a portion
of the premium, the government pays the rest.
Your first decision is to find a specialist in crop insurance, who understands the
program and the risks you face in farming & bringing your crop to completion.
At Golden Pacific Crop Insurance, our agents have two decades of experience in
crop insurance and still farm our own crops as well. We know what you face out
there with ever increasing food safety regulations, water costs and labor issues.
We know the crops because we grow them. Give us a call and learn how easy it is to
have this important risk management tool working for you. Itís much more affordable
than you may think. Call us at (559) 825-CROP, thatís (2767)
or by email at [email protected]

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