top of page

Apple Crop Insurance Program

February 28th, 2022

Federal Crop Insurance Corporation

Risk Management Agency

US Department of Agriculture 1400 Independence Ave. SW Washington, DC 20250

To Whom It May Concern:

I am pleased to submit Public Comments on FCIC’s Proposed Changes to the Apple Crop Insurance Program. At the outset, FCIC asks us to comment on our experience in the field. I have extensive experience in this field, principally, 25 years sourcing fruits and vegetables worldwide for US and foreign markets.

That experience led me to see that farmers often have limited understanding of the large number of variables affecting their farming operations, and their success in the marketplace. To help farmers and other stakeholders in the food chain overcome these shortcomings, my company, Agtools, created a Data Analytics Platform containing 4 billion records of data on over 500 specialty crops, including apples, from major growing areas of the world. The Agtools Platform covers 76 variables that affect agriculture, and aggregates 50 years of weather data in growing areas throughout the world.

Thank you for the opportunity to comment on FCIC’s proposed changes to the Apple Crop Insurance Program.

Martha Montoya

Founder & CEO

Agtools, Inc.

Orange, CA

Public Comments

FCIC’s Proposed Changes

to the Apple Crop Insurance Program

Document Citation: 86 FR 71396

Pages: 71396-71406 (11 pages)

CFR: 7 CFR 457

Agency/Docket Number: Docket ID FCIC-21-0007

RIN: 0563-AC75

Document Number: 2021-26989

# # #

Background – According to industry figures, the United States has over 25,000 apple growers in all 50 states. They produce, on average, 11 billion pounds of apples annually, on approximately 322,000 acres of land, for total revenue of just over $3 billion. One-in-four apples are exported, amounting to over 40 million bushels annually. The US is the second largest apple producer in the world after China. This is a very large industry, which makes the proposed changes to the insurance program exceedingly important. Community Benefit - There are several beneficial provisions among the proposed changes that FCIC is proposing to the Apple Crop Insurance Program. From our perspective, three of the most important are:

  • Item #1 – FCIC proposes to allow producers to elect different coverage levels (and percent of price elections by type) which allows producers to manage coverage and price risk more effectively.

  • Item #2 – FCIC proposes to allow separate coverage levels by apple type

  • Item #3 – FCIC proposes to allow producers to insure at higher levels those apples sold predominantly to direct markets or premium processing markets.

We refer to them as Items #1, #2 and #3 solely for purposes of distinguishing them among the many proposed changes to the existing regulations.

General Comments These proposed changes are of great benefit to apple growers throughout the country for reasons discussed below. We commend FCIC for conducting its extensive “Listening Tour” over the past several years wherein stakeholders all over the country were consulted, including apple growers, AIP insurers, and industry leaders. FCIC complemented its Listening Tour with a contracted study on the apple crop insurance program. This study provided excellent insights on ways to improve the program. USDA anticipates that the revised Apple Crop Insurance Program will become effective beginning with crop year 2023. Comments on Specific Provisions Item #1 – FCIC proposes to allow separate coverage levels and percentages of price elections by apple type. This is designed to address situations where more than one type of apple is planted on a given acreage.

The changes in the proposed regulations permit separate optional units that do not have a clear and distinct planting pattern. The basic provisions that require crops to be planted in a manner that results in a clear and discernible break in the planting pattern at the boundaries of each optional unit are not applicable for optional units by type.

If optional units by type were not allowed in such circumstances, there would be times that AIPs would have to combine units. The FCIC proposes, therefore, to clarify that optional units consisting of noncontiguous land, or apple types, may be established in addition to, or instead of, the optional unit provisions in the Basic Provisions.

This will allow for separate optional units for apple types that do not have a clear and discernible planting pattern, or clear and discernible boundaries, such as a situation wherein more than one type of apple is planted on a given acreage. This approach is allowed as long as producers maintain separate records/documentation of production for each optional unit. As USDA points out in the proposed rule, Granny Smith apples, for example, are often planted with other types of apples on a given acreage.

We commend FCIC for devising a schema that fine-tunes the existing insurance system so as to enable farmers to classify and insure their apple crops with greater precision, resulting in a more fair and balanced insurance program. This makes the apple insurance program a more effective risk management tool benefitting rural America by strengthening the economic backbone of agricultural producers and rural communities.

Item #2 At present, there are four categories of fresh apples: Fresh (combined), varietal group A, varietal group B, and varietal group C. Under the current regulations, producers who insure apples under any of the fresh types must select the same coverage level for all of their fresh types.

Under the proposed changers, producers will be able to select separate coverage levels for each type of fresh. This gives them the ability to structure their coverage based on the perceived risk associated with each fresh type. For example, the producer could select 90% coverage for varietal group A, and 70% coverage for varietal Group B, and so forth. This enhanced flexibility makes the apple insurance program a more effective risk management tool benefitting apple producers.

Item #3 – Direct marketing is the sale of the insured crop directly to consumers without the intervention of an intermediary, such as s wholesaler, retailer, packer, processor, shipper, buyer, or broker. FCIC is proposing to allow producers to insure higher value apples (sold predominantly to direct markets or to premium processing markets) for higher premiums. Under this revised approach, the farmer could either:

  1. Insure the crop under the USDA definition of “Fresh (combined)” which go into the general consumer market, or

  2. Elect to insure the crop at a higher level due to the fact that apples sold into direct markets (e.g., farmers’ markets), or premium processing markets, bring higher prices.

This provision affords producers the opportunity to insure at a price (called the “premium price election” which is greater than the published price election) for apples that are sold into a direct market or a premium processing market. Certain markets demand higher prices and include such items as apples for baby food, apples for hard cider, or apples for “slicers” for school lunch programs. These premium processing apples typically command about 20% higher prices compared to standard processing prices.

The underlying idea of this proposed change is to enable farmers to secure coverage based on the pricing in markets into which they actually sell their product, i.e., standard processing markets, or premium processing markets. This is a much more flexible approach that allows farmers the ability to select insurance coverage that more realistically reflects the values actually secured in the marketplace for their crops.

The latitude afforded to producers in this more flexible approach is in line with our comments on the section above under Items #1 and Item #2. We commend FCIC for fine-tuning the existing insurance system so as to enable farmers to classify and insure their crops more realistically, resulting in a more fair and balanced insurance program. This makes the apple insurance program a far more effective risk management tool benefitting rural America.

Comments on Other Provisions:

Dicing - We commend FCIC for clarifying the use of the term “dicing” by adding it to the list of actions that constitute changing apples from their basic form. Along with peeling, slicing, and crushing, dicing is one of the most common steps in processing apples. Why it was left out to begin with is a mystery. Incorporating the term “dicing” into the common practices for processing apples will take away the confusion that existed heretofore over the meaning of dicing.

Cultural Practices - We also commend FCIC for adding flexibility for the inclusion of non-enumerated cultural practices. This includes such practices as spraying, hail netting, misting systems, wind machines, etc.

Other Specialty Crops – The flexibility afforded to apple producers through the proposed changes to the existing regulations regarding the apple insurance program would seem to be equally relevant to growers of other fruits, vegetables, and row crops as well. The shelf life of some crops is quite variable and growers should be afforded the flexibility of of being insured at varying rates reflecting those differences. Some varieties of peaches and cherries, for example, spoil far more rapidly than other more durable varieties. Therefore, the changes proposed to the apple insurance program might be equally relevant to USDA/FCIC’s insurance program for other fruits, vegetables, and row crops.

Minority and Women Farmers – Minority and women farmers don’t typically seek crop- insurance for apples por any other specialty crops. What is USDA doing to reach these populations with USDA crop insurance programs? Are there some specific activities that USDA could undertake to reach these populations and make the crop insurance programs more affordable and readily available to them?

# # #

Agtools, Inc. 8502 East Chapman Ave. Orange, CA 92869

Martha Montoya Founder and CEO Charles Harrison EVP – Compliance Miguel Montero EVP – Strategy Stephen Denlinger Policy Analyst


bottom of page