Feasibility of Insuring Local Food Production

Excerpts from the report: Production of food and food related products for local markets is a significant and longstanding practice in the U.S. agricultural industry. While there are risk management options available to local food producers, depending on what they sell, there are several factors that can either restrict access to crop insurance or incentivize producers to forego it. For example, some Crop Provisions restrict access to direct marketers unless stated otherwise in the Special Provisions and the recordkeeping requirements of Whole-Farm Revenue Protection (WFRP) discourages many from obtaining coverage. In response to this and other issues, the Food, Conservation, and Energy Act of 2018 (2018 Farm Bill) amended the Federal Crop Insurance Act to direct RMA to carry out a study to determine the feasibility of a policy to insure production of floriculture, fruits, vegetables, poultry, livestock, or the products thereof that is targeted toward local consumers and markets. It did not define “local” and various industry groups—including some U.S. government agencies—have defined the term differently. The overarching objective was to undertake research that assesses the likelihood of successfully developing an insurance program for local food producers. In June 2020, the U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) contracted with Agralytica to assess the feasibility of insuring local food production.