By: Trevor Troyer – Vice President at Agricultural Risk Management, LLC
Grape crop insurance is a federally subsidized program that is administered by the USDA Risk Management Agency. Policies are sold by independent agents and agencies throughout the country. There are thirteen approved insurance providers (insurance companies) that work with the USDA RMA.
Grape crop insurance is an Actual Production History (APH) policy. This means that it uses a vineyard’s historical production to determine how much is covered. You are covering an average of your tons per acre per variety. Since crop insurance is partially subsidized, the insurable varieties, prices per ton, premiums are all set by the USDA. This also means that there is no cost difference from one insurance company to the next. If anyone represents that they can get you a lower premium for the same coverage, it is false. It is true that some agents and agencies are more knowledgeable with grape crop insurance. How your policy is set up and with what endorsements you have does make a difference.
Per the Grape Crop Provisions grape crop insurance covers you for the following:
10. Causes of Loss.
(a) In accordance with the provisions of section 12 of the Basic Provisions, insurance is provided only against the following causes of loss that occur during the insurance period:
(1) Adverse weather conditions;
(2) Fire, unless weeds and other forms of undergrowth have not been controlled or pruning debris has not been removed from the vineyard;
(3) Insects, except as excluded in 10(b)(1), but not damage due to insufficient or improper application of pest control measures;
(4) Plant disease, but not damage due to insufficient or improper application of disease control measures;
(7) Volcanic eruption; or
(8) Failure of irrigation water supply, if caused by an insured peril that occurs during the insurance period.
(b) In addition to the causes of loss excluded in section 12 (Causes of Loss) of the Basic Provisions, we will not insure against damage or loss of production due to:
(1) Phylloxera, regardless of cause; or
(2) Inability to market the grapes for any reason other than actual physical damage from an insurable cause specified in this section. For example, we will not pay you an indemnity if you are unable to market due to quarantine, boycott, or refusal of any person to accept production.
An agent will work with you to set up individual databases for each of your varieties. If you have vineyards in different locations, it can sometimes be beneficial to set them up separately. This can be good when you have a claim. You might have a loss in one location but not in another. You don’t want your production from different locations co-mingled, as you might not have enough of a loss to trigger a claim payment.
The databases can go back 10 years, if your vineyard has been in production that long. Minimally 4 years is needed to set up an APH policy’s database. If the vines have just become insurable a Transitional Yield (T-Yield), based on the county and variety, can be used to fill in up to three years. If you have purchased a vineyard that has been in production, you can transfer the production history. You must have records or some way to prove the vineyard’s history though. The database can only be set up as far back as you have production records to prove your tonnage. Production records are not required at the time you sign up for crop insurance or at production or acreage reporting times. But they may be required at the time of a claim. It sometimes comes up that an insurance company may need to do a review and production records are needed. So, it is good thing to keep them on hand.
Here’s what the 2024 Crop Insurance Handbook (CIH) from the USDA says grape about production records:
A. Supporting Records
Settlement sheets, sales receipts, machine harvest records, certified scale records, pick records and final or year-end statements from a winery, cannery or processor must indicate net paid tons of Grapes delivered by variety. Converting gallons of wine to tons of grapes does not qualify as acceptable records.
The CIH then goes into more detail about records and what needs to be on them. Your agent can provide you this information as needed.
What about insurability of the grapes? Vines need to be in their 4th growing season for the grapes to be insurable. A minimum of 4 years is needed to do the average, if the grapes have just become insurable then a T-Yield, as mentioned earlier, is used in place of any missing years. Usually, the third growing season after being grafted is considered insurable. The vines must have produced an average of at least 2 tons per acre, in at least one of the preceding three crop years. There can be exceptions to this rule, though. Sometimes there are other requirements located in the Special Provisions for a certain county. In California the USDA Davis Regional Office puts out Informational Memorandums that lay out specific requirements for the State of California. These differ from other growing regions in the United States.
Grape crop insurance is available in the following states; Arkansas, California, Colorado, Connecticut, Idaho, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Virginia and Washington. Grape crop insurance is not available in every county. For a list of insurable counties, you can look at the RMA’s website at rma.usda.gov or contact your agent.
Insurable grape varieties are also different between states and counties. The varieties are usually set by what has been being grown in that county or the climate of a particular state or county. Even though there are differences between AVAs in a certain state/county, the insurability, prices, and premiums are all set by county not AVA. Most of the time if a particular variety is not listed for a county it can be insured. There are Types/Practices in the actuarial documents for each county that list out specific varieties and also make allowances for others. For example you might look up Hood River County in Washington State. It lists; Cabernet Sauvignon, Chenin Blanc, Gewurztraminer, Grenache, Cabernet Franc and so on. There is also listed “Other White Varieties” and “Other Red/Pink Varieties”, so if you have a grape variety that is not listed under it’s own name you can insure them under one of these categories.
You can not cover 100% of your average production per variety. You can choose coverage levels from 50% to 85% of your average. Because of this, there is a sort of built in production deductible. Coverage levels are in 5% increments. The coverage level is relative to the premium, the lower the coverage level the lower the premium will be. Obviously with higher coverage levels claims are more likely to be paid out; therefore the premium will be higher. What the correct coverage level for your needs is something your crop insurance agent can help you with. Risks are different between states and counties.
Grape crop insurance is a valuable tool to mitigate risk for a vineyard.
For More information please contact
Agricultural Risk Management, LLC
Toll Free: (888) 319-1627
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