USDA’s Risk Management Agency (RMA) has dropped its policy requiring nursery growers’ plant inventories to be within $2,500 of their reported inventory values at time of loss.
Heeding the green industry’s insistent position that this tolerance was excessively restrictive and unrealistic given fluctuations in nursery plant inventories, RMA issued a new bulletin late last week to resolve this issue. This bulletin drops the $2,500 inventory tolerance and replaces it with a provision whereby inventory values must be supported by documentation that is within ten percent of the inventory values for each reported basic unit. View Bulletin No. MGR-08-013.1.
This ten percent figure provides greater flexibility to growers. Nonetheless, it is still a tolerance, so if a grower exceeds it, the grower will be unable to collect on a claim and crop insurance may be canceled on any unit out of the tolerance.
FNGLA took the lead in voicing the industry’s concerns and deserves many kudos for their efforts! FNGLA has stated that it will continue to work with RMA to transform this new and better tolerance into a provision similar to the current under-reporting factor where one’s loss payment is reduced by a factor, but the grower retains insurance coverage. FNGLA commended U.S. Congressmen Adam Putnam, Mario Diaz-Balart, Tim Mahoney, U.S. Senator Mel Martinez and Florida Commissioner of Agriculture Charles Bronson for working with FNGLA to push this welcome change in RMA policy.
This new ten percent tolerance is applicable to buy-up policies and does not apply to catastrophic level (CAT) policies since a ten percent difference between actual and reported inventory values is already allowed. Nursery crop insurance policyholders are reminded to maintain and provide records in accordance with their insurance policy. For more information, please contact your crop insurance agent.