South Dakota Nursery and Landscape Association

Crop Insurance: A Risk Management Tool for South Dakota Nurseries

February 18th, 2010

Press release from USDA Risk Management Agency:

There are almost 500 licensed nursery dealers and growers in South Dakota and in 2009 they insured $494,338 worth of product. Nationally, nurseries insure more than $3 billion making it one of the largest value crops covered in the U.S. The 2007 NASS Ag Census showed South Dakota sales in the nursery, greenhouse, floriculture and sod sector were $19,984,000.

Multi-peril crop insurance is available for nurseries that receive at least 50% of their gross income from wholesale sales and covers both plants grown in standard containers or in the field. It provides producers with protection against natural causes of loss, such as adverse weather, failure of irrigation supply, fire and wildlife damage. Coverage can be designed to fit your particular business plan with various coverage levels and several endorsement choices. Here are some features that may be of interest to South Dakota growers:

• Choose either a catastrophic (CAT) coverage level (50% coverage) or optional buy-up coverage (up to 75% of inventory value).
• Different plant types can be insured individually when purchasing buy-up coverage.
• Inventory value is determined by the producer’s catalog and price lists (limited to a maximum published in the Risk Management Agency’s plant price schedule).
• Inventory values can be adjusted several times during the year to take into account normal fluctuations. A “Peak Inventory Endorsement” is also available for additional flexibility.
• Unlike most other multi-peril crop insurance policies, nursery crop insurance will cover multiple insurable losses during the crop year up to the amount of insurance purchased.
• The Federal government subsidizes premiums based on the coverage level chosen. Premium rates are reasonable for buy-up coverage. The only cost for CAT coverage is an administrative fee of $300.

You can purchase nursery insurance any time, with a 30-day waiting period before insurance attaches. Read more about nursery insurance on our fact sheet at http://www.rma.usda.gov/pubs/rme/nursery.pdf. You should submit your application by May 1 to ensure that you are covered for the whole year. Visit a local crop insurance agent for more details.  You can find a local agent using the Risk Management Agency’s Agent Locator at http://www3.rma.usda.gov/apps/agents/.