On August 28, 2020, the Risk Management Agency (RMA) issued Product Management Bulletin: PM-20-060 that stated on August 15, 2020, the Federal Crop Insurance Corporation Board of Directors approved the California Citrus Tree Cop Insurance Program effective for the 2021 and succeeding years in select California counties. https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-060. RMA also published the California Citrus Tree Crop Provisions, and Handbooks. https://www.rma.usda.gov/-/media/RMAweb/Policies/California-Citrus-Tree/2021/California-Citrus-Tree-Crop-Provisions-21-CCT.ashx; https://www.rma.usda.gov/-/media/RMAweb/Handbooks/Privately-Developed-Products—20000/California-Citrus-Tree/2021-20560L-California-Citrus-Tree-Loss-Adjustment-Standards-Handbook.ashx; https://www.rma.usda.gov/-/media/RMAweb/Handbooks/Privately-Developed-Products—20000/California-Citrus-Tree/2021-20560U-California-Citrus-Tree-Crop-Insurance-Standards-Handbook.ashx.
RMA states the coverage includes:
- Coverage for grapefruit, lemons, mandarins, oranges, tangelos, tangerines, and any other citrus trees designated in the actuarial documents.
- Separate insurance policies for each commodity, with a separate administrative fee charged for each commodity the producer elects to insure. For example, this allows producers to insure all their lemon trees and none of their grapefruit trees and allows varying coverage levels by commodity.
- Occurrence Loss Option (OLO), which is also available in the other tree-based dollar products, is available for an additional premium.
- Insureds with freeze protection are eligible for a premium discount.
- Coverage of citrus trees by age is available from planting to 4 years.
- Insurable causes of loss are freeze, fire, and failure of the irrigation water supply if caused by an unavoidable naturally occurring event.
ANALYSIS – The coverage for the California citrus trees stated by RMA is consistent with other tree policies. However, all these provisions are not readily apparent in the policy. There is nothing in the California Citrus Tree Crop Provisions that states that insureds with freeze protection are eligible for a premium discount. Section 7 does refer to “applicable premium adjustment percentages shown in the actuarial documents” but there is no specific reference to freeze and producers do not receive copies of the actuarial documents. Further, the actuarial documents for 2021 for California citrus trees do not reference a premium discount if the producer has freeze protection. There is nothing in the policy that states that coverage is available for citrus trees from planting to 4 years. Further, there are no references to this coverage in the actuarial documents. These are specific coverages or discounts that should have been included in the California Citrus Tree Crop Provisions. Given their omission from the California Citrus Tree Crop Provisions and actuarial documents, it is questionable whether such coverage or discounts are available to producers for the 2021 crop year.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.