Right now, tart cherry crops aren’t eligible for federal crop insurance. Photo: Larry Page (flickr)
Last year’s tart cherry loss has inspired a flurry of activity to explore federal crop insurance to protect Michigan growers.
Wayne Wood, president of the Michigan Farm Bureau, said, “The reason they didn’t have crop insurance before is that it’s such a small industry, and small companies couldn’t make the investment and do the research to justify the policy.”
According to the Risk Management Agency, the majority of specialty crops — like tart cherries — in the state aren’t eligible for insurance. They include asparagus, cucumbers, squash, Christmas trees, sweet corn, strawberries, honey, celery and maple syrup.
“And quite frankly, when you haven’t had an event like this since 1945, are you really going to buy insurance?” Wood said. “The demand was low and the demand is high today, as you would expect.”
Many specialty crops do have insurance programs, like apples, blueberries, potatoes, grapes, onions, peaches and tomatoes.
“When you don’t have any income for a year you’re looking for protection,” he said.
The Risk Management Agency, part of the U.S. Department of Agriculture, and state researchers are working with the Farm Bureau to get the insurance program started by 2014.
The latest push for tart cherry insurance began last spring, said Phil Korson, president of the national Cherry Marketing Institute and the Michigan Cherry Committee based in DeWitt.
Michigan produces approximately 75 percent of U.S. tart cherries. Most of the crop was lost after record-high temperatures last March lead to early buds followed by a killer frost.
The Northwest corner of the Lower Peninsula can produce 275 million pounds annually, but in 2012, the official amount was 11 million pounds, according to the Cherry Committee.
In 2002, there was a short crop and only 15 million pounds were produced.
But, Korson said, there was a stockpile to draw on that year. In contrast, there was no inventory in 2012, which exacerbated the problem.
Korson said tart cherries haven’t been covered in the past because it’s a “risky business.” Advocates tried to add tart
While farmers can get insurance for apple crops, tart cherry growing is seen as risky. Photo: Haley Walker
cherries to the sweet cherry pilot program, but it was unsuccessful until the 2012 disaster.
The expectation is that the new program will be modeled after the sweet cherry pilot program that began in 2000, he said.
But tart cherry farmers will be left without a crop insurance option in 2013 as the proposed program is being formed.
Korson said that it’s more important than ever for tart cherry growers to have insurance because other forms of federal disaster assistance, like the Noninsured Crop Disaster Assistance Program and the Supplemental Revenue Assistance Payments Program, are shrinking or inadequate.
“We’re crossing our fingers” that the weather will allow a better crop this year, he said.
Jim Nugent, owner of Sunblossom Orchards in Suttons Bay and chair of the Cherry Committee, said it would be a “disaster” if this year were as bad as the last. That would put many growers out of business, put pressure on processors and make it difficult to recapture markets.
“It’s got a lot of people struggling, and the pressure is going to come this year,” he said.
Nugent, who grows sweet and tart cherries, said he insured his sweet cherries for 75 percent last year.
The program is revenue-based, so growers have the option to insure a percentage of their revenue. The tart cherry program will likely be similar.
Last year, the sweet cherry crop insurance program was available in only two Michigan counties, Leelanau and Grand Traverse. The program has since been expanded to Manistee, Benzie, Antrim, Mason and Oceana counties, which means most of Michigan’s sweet cherries are covered.
Nugent and Korson agreed that sweet cherry insurance became available first because of pressure from western states.
Michigan produces about 20 percent of U.S. sweet cherries. The rest comes from western states including California and Washington.
There was a program in the works for tart cherries in the late 1990s, but it was changed to sweet. And the federal government has hesitated to move into tart cherries until after the sweet program moved out of the pilot stage, they said.
Ken Nye, a commodity specialist for the Farm Bureau, said, research must be done to determine the risk involved in producing tart cherries and to come up with a system of premiums that is advantageous to farmers and insurance venders.
It has taken so long to get insurance for tart cherries because it’s such a small crop. The government prefers to eliminate bigger risk problems and deal with larger crops such as corn, and the price to start the programs is about the same, he said.
“We think of tart cherries as important in Michigan, but it’s small in the grand scheme of things,” he said.
He said the ultimate goal is to make insurance available for every commodity, but it will take a while to get there.
“There are still a lot of holes for specialty crops in Michigan,” Nye said.