Nursery Commodity Insurance Program

Updated: Apr 6


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USDA’s Risk Management Agency (RMA) established the Nursery Commodity Insurance Policy Program, providing risk management for all eligible nursery commodities on farm operations. This program is specifically for producers who field- or container-grow nursery plants and sell them through wholesale marketing. The nursery crop insurance policy is not revenue-based coverage, meaning there is no minimum income guarantee. Instead, the policy protects operations against loss of asset values from nursery crops produced during the insurance period. Protection will cover unpredictable circumstances, such as severe weather disasters or marketplace price hikes, by insuring the nursery crops through both flexible and affordable coverage policies. CAT coverage is available under Nursery Crop Insurance.


Coverage levels range from 50 to 75 percent. The insurance year for the Nursery Crop Insurance Policy will depend on how you file your application. If you apply on or before May 1 of the crop year, coverage will begin on June 1, unless the application is rejected. If you apply after May 1, coverage for the Nursery Crop Policy will not begin until the 31st day after appropriate documentation is received.


Applying

The Nursery Commodity Insurance Policy program is currently available in every U.S. county for which a premium rate is provided in the actuarial documents. Sales closing and coverage cancellation dates for the 2021 calendar year will be May 1 in Maryland. The insurance period begins on June 1 if you applied by May 1 or have a continuous policy, and changes to your contract date, if needed, must be filed by January 31. Check with your local crop insurance agent to determine what your reporting deadlines would be. Producers can buy directly by contacting a crop insurance agent. Please contact your local USDA Service Center or the call center for further application questions or assistance at 877-508-8364.


The operation’s indemnity claims should be made no later than 60 days after the end of the insurance period. Producers must submit a notice of loss within 72 hours after the discovery of damage.


*A list of crop insurance agents is available at all USDA service centers and on the RMA website at www.rma.usda.gov/en/Information-Tools/Agent-Locator-Page.



Eligibility

Producers eligible for Nursery Crop Insurance must be U.S. citizens or resident aliens, and must be eligible for Federal benefits. They must also practice appropriate non-contiguous field-grown or container growing techniques meeting the criteria of nursery plant insurability. Eligible nursery commodities include fruits, nuts, flowers, bushes, trees, shrubs, greenhouse-grown crops, cactus, and liner plants that are market sold and listed in the actuarial documents.


To be eligible for coverage, a producer must:

  • Have a nursery which receives at least 40 percent of its gross income from the wholesale marketing of nursery plants

  • Have a share of the nursery plants

  • Have their nursery inspected and approved prior to the beginning of insurance coverage

  • Grow all nursery plants in the correct medium, and then sell them with the root system attached

  • Meet all the requirements for insurability:

  • Grow nursery plants under the guidelines of the Eligible Plant List and Plant Price Schedule (EPLPPS), which contains the following information:

  • The botanical and common names of insurable plants;

  • The cold protection requirements for container grown material and areas in which they apply;

  • The hardiness zone in which field grown material is insurable;

  • The designated hardiness zones available for each county;

  • The plant type, storage key, and hardiness zone classification for each plant on the list; and

  • A schedule of insurable plant prices establishing the highest value accepted for insurance purposes, unless otherwise allowed by the policy or an endorsement to the policy.


Ineligible nursery plant commodities, which are not covered, include plants which are solely for harvesting buds, flowers, or greenery, and plants grown as stock plants, garden-grown, or grown with 2 or more different genera, species, subspecies, varieties, or cultivars in a single container.


Coverage Plans

Nursery Commodity Insurance has two primary coverage plans: CAT coverage and Buy-Up Coverage. Catastrophic risk protection (CAT) protects your nursery crops in the event of a natural disaster. If the catastrophic coverage level is elected, it will be fixed at 27.5 percent of your plant inventory value, and the only cost is an administrative fee of $655. Buy-Up Coverage protects your nursery crops, by your share, through coverage ranging from 50 to 75 percent of your plant inventory value.


Additional Coverage Policies

Nursery commodity policy recognizes that operations may experience certain periods when initial coverage may need to be increased. An insurance company can provide additional coverage to your basic policy through endorsements.

  • Peak Inventory endorsement: This is ideal for nursery growers who need a flexible policy to adjust coverage based on fluctuating inventory. If your inventory tends to increase during peak periods and may be significantly higher than your annual plant inventory value, you should consider this additional insurance coverage. This is not available with CAT coverage.

  • Rehabilitation Endorsement: This endorsement is an addition to the basic policy and provides reimbursement for spending on labor and material, such as pruning and setup (righting, propping, and staking) of field-grown damaged plants. The damage must be caused by an insured cause of loss and have a reasonable expectation of recovery. This is not available with CAT coverage.

  • Pilot Nursery Growers Price Endorsement: This additional coverage policy is a supplement to the basic policy which insures specific plants at maximum wholesale prices higher than those shown on the EPLPPS. This will allow the nursery grower to permit higher inventory values on your Plant Inventory Value Report (PIVR). This policy is only available in 19 states, and you must buy this at the time you apply for coverage or, on or before the sales closing date.


Plant Inventory Value Report (PIVR)

To calculate the unit amount of insurance a policyholder will receive, the value of the insurable plant inventory must be established using a PIVR. You must submit a separate PIVR for each insured practice, and the report(s) must also include a crop inventory valuation report or physical plant inventory and price documentation. The PIVR requires you to provide two copies of your most recent wholesale catalog or price list, unless it was submitted electronically. Electronically submitted catalogs must be in PDF format and suitable for printing. Wholesale catalogs are required to:

  • Be typewritten and legible;

  • Show an issue date on the cover page (may be handwritten);

  • Contain the name, address, and telephone number of nursery;

  • Be provided to customers and used in the sale of your plants; and

  • List each plant name, plant or container sizes, and wholesale price.


Insured Value

Nursery crop insurance is calculated based on multiplying the basic unit value by your selected coverage level and by your share, minus any previous indemnities during the crop year paid under the Nursery Crop Provisions.

The amount of approved insurance covered by Nursery Crop Policy will depend on:

  • Plant inventory value;

  • Producer share amount; and

  • The coverage level you choose (50-75 percent) multiplied by the above amounts. This will equal the insurance amount.

For example, your plant inventory value is $100,000, share amount is 1.00, and insured at 65-percent coverage option. Based on this, your insurance amount will be $65,000 ($100,000 * 0.65 * 1.00).



Value Loss

Losses occur if the operation’s field market value falls below the plant inventory value. Items to consider when determining indemnity after a loss include:

  • Plant inventory value;

  • Coverage level percentage;

  • Field market value before loss;

  • Value of loss;

  • and deductible calculated by subtracting your coverage level (as a decimal) from 1 and then multiplying that value by the plant inventory value.

The Nursery Crop Policy provides protection against the loss of plant value due to an unavoidable natural cause of loss occurring during the insurance period. An inspection may be required to evaluate losses.

Unavoidable natural causes of loss that are covered include:

  • Adverse weather conditions (wind, hurricane, and freeze)

  • If cold protection is required by the EPLPPS, adequate and operational cold protection measures must be in place

  • Failure of irrigation water supply, due to drought

  • Fire

  • Wildlife

Causes of loss not covered include:

  • Collapse or failure of buildings/structures, unless caused by an insurable cause of loss

  • Disease or insect infestation, unless effective control measures do not exist

  • Failure of plants to grow to an expected size

  • Inadequate power supply, unless caused by an insurable cause of loss

  • Unsold nursery products due to a stop sales order, quarantine, boycott, phytosanitary restriction on sales, or buyer refusal


Premium Subsidy

All nursery crop policyholders receive premium subsidy. This full premium subsidy ranges from 55 to 67 percent, depending on the level of coverage selected. The premium is calculated based on multiplying the basic unit value by your selected coverage level and by your share. Your premium share value percentage ranges from 33 to 45 percent based on your selected coverage level. If you have CAT coverage, the premium is calculated by multiplying the basic unit value by your selected coverage level and share, and then multiplying this value by an additional 55 percent.



For more information regarding the Nursery Commodity Policy, please visit:


  1. https://www.rma.usda.gov/en/Fact-Sheets/National-Fact-Sheets/Nursery-Commodity-Insurance

  2. http://cropinsurancesolutions.com/nursery-insurance/

  3. https://www.rma.usda.gov/en/Topics/Nursery



This material is funded in partnership by USDA, Risk Management Agency, under award number RMA21CPT0011599