Pulse Industry Lands Revenue Insurance Pilot Program

 

It took 13 years, but the dry pea, lentil and chickpea industry finally has a pulse crop revenue insurance program approved for development. The pilot program does not have a timeline for implementation, but the Risk Management Agency (RMA) staff will begin work on it immediately.

The USDA Federal Crop Insurance Corporation (FCIC) Board of Directors approved the pulse revenue insurance pilot program March 1, 2012, after a 90-minute question and answer session. Two of the five expert reviews opposed the proposed policy. The debate largely centered on whether or not to approve a revenue insurance policy for a group of crops without a futures market.

The pivotal factor in earning the approval of the FCIC board was the strength of the grower assessment data collected by the USADPLC office and the commitment of the pulse industry’s processors to provide spring contract data. Alex Offerdahl and Cole Arthen of Watts & Associates, the developers behind this pilot program proposal, provided indispensable support and data during this long process.

The pulse crop revenue insurance policy was a joint submission with the Northarvest Bean Grower Association representing North Dakota and Minnesota bean growers.  In addition to dry peas, lentils and chickpeas, the pilot program will include pinto, black, great northern and dark red kidney beans.

 

The Start of Pulse Crop Revenue Insurance

The pursuit of pulse crop revenue insurance started in the fall of 1998. Western Pea & Lentil Growers Association board member Dick Wittman (also past USADPLC chairman), USADPLC CEO Tim McGreevy and RMA western regional director Dave Paul met to discuss the need for pulse crop revenue coverage. The board approved a policy position a few months later, and it has been a dedicated effort ever since then.

The late, past chairman of the USADPLC, Jim Evans, continued the effort for pulse crop revenue insurance with the submission of the first failed proposal, and Greg Johnson (a past USADPLC chairman as well) led the second proposal also rejected by the FCIC board.

Current USADPLC Chairman Jim Thompson led the third effort in landing pulse crop revenue insurance for growers. Due in large part to the efforts, trials and failures of the past 13 years, this third time knocking on the FCIC door with another pulse crop revenue insurance proposal proved to be the winning effort.

“It’s hard to believe how long this has taken, but it has been worth the battle,” said Wittman a farmer from Culdesac, ID. “When we look back 25 years, the FCIC products serving the pea and lentil industry left much to be desired. A common comment from growers was, ‘Why buy the coverage? When you get to a loss claim situation, the fine print figures out a way to never pay!’ Finally we have a risk management tool that puts us on a more level playing field with traditional grain producers.”

 

Moving Forward with this Pilot Program

With the approval of the FCIC board, the RMA staff has started development of this pilot program for pulse crop revenue insurance. Spring contract data from industry processor members will be critical to the success of this policy as will the continued collection of grower assessment data. The support for this risk management tool for pulse growers has been and will continue to be important.

Now that pulse crop revenue insurance for dry peas, lentils and chickpeas has been crossed off the resolution list, focus turns to implementation of this pilot program. Getting this policy in the hands of growers as a risk management option is the next priority for this industry.

“A lot of thanks go to all the people who had worked on getting this policy approved in the past decade,” said USADPLC Chairman Jim Thompson, a farmer from Farmington, WA. “This is an example of persistence paying off. We just gave them no choice but to give us our pilot program. Hats off to Watts & Associates for all their hard work to get this pilot program ready. While there’s a long road ahead, it’s nice to leave Washington, D.C. with something positive for our pulse growers and industry.”

 

 

Pulse Crop Revenue Coverage Pilot Program Details

The Pulse Revenue policy approved by the FCIC board will function identically to the current “Combo Revenue Coverage” for wheat, corn and soybeans with two exceptions:

1. The “Projected Price” will be determined by analyzing U.S. processor  contract prices prior to planting and

2. The “Harvest Price” will be determined by analyzing data from the first four months of the ID,WA,MT & ND grower assessments collected by each state check off group instead of the futures market

Potential claims are projected to be paid 1-2 months after the four month Harvest Price data collection period.  

Pulse Crop Revenue Insurance Timeline


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