USDA Announces Crop Insurance Deadline for PA Nurseries
Posted: April 13, 2012
The capacity to bear risk primarily depends upon whether or not the operation can withstand financial losses.
Understanding exposure to risk is fundamental to business success. This implies an understanding of risk sources, tradeoffs and management strategies. Understanding risk exposure will allow managers to meet their risk management goals by taking appropriate action.
The two basic questions every business manager must answer to effectively manage risk are:
- What is the risk bearing capacity of my business?
- What is my willingness to assume risk?
The answers to these questions, and the process followed to answer them, will help us determine the costs and benefits of mitigating risk exposure.
Risk Bearing Capacity
The capacity to bear risk primarily depends upon whether or not the operation can withstand financial losses without being forced into solvency or liquidation. Financial risks are largely determined by production and market risks. If production declines, and/or if prices drop, profit decreases and losses occur. These losses must be covered or absorbed out of equity capital or net worth.
Crop insurance, particularly revenue-based crop insurance, allow you to protect a specific price for your crop. According to the Raleigh Regional Office, USDA, Risk Management Agency, Pennsylvania nursery producers should be aware that the final date for a new applicant to apply for 2013 nursery crop insurance is May 1, 2012.
New applications for crop year 2013 may be accepted until May 1, 2012, with coverage beginning 30 days after receipt of your signed application, a Plant Inventory Value Report (PIVR) for each insured practice, as applicable, and two copies of your most recent wholesale catalogs or price lists. Premium will be prorated when PIVRs and/or catalogs or price lists are submitted with applications after the sales closing date.
For existing policies, coverage will automatically attach on June 1, 2012. The crop insurance year runs from June 1 through May 31. Growers may elect to insure field-grown and container grown practices under separate policies; for example, one practice may be insured under the CAT policy and the other practice may be insured under a Buy-up policy.
Crop insurance provides protection for field-grown and containerized nursery plants against losses due to adverse weather conditions, plus losses due to fire and wildlife. Insurance premium subsidies have been significantly increased in recent years, particularly at the higher levels of coverage.
Producers are strongly urged to contact a local crop insurance agent as soon as possible for a premium quote and additional details.
For a list of crop insurance agents in your area, contact the local USDA, Farm Service Agency office or log on to the Risk Management Agency Agent Locator List for 2012.
Nursery Commodity Insurance, A Risk Management Agency Fact Sheet