USDA Improves Crop Insurance Coverage for Tobacco

U.S. Department of Agriculture’s Risk Management Agency (RMA) announced today that beginning with the 2023 crop year, it is expanding contract provisions for price and quality for more types of insurable tobacco to its crop insurance coverage.

“After listening to our stakeholders, tobacco farmers and other partners, we know these changes will help improve the integrity of the program and make it more sustainable going forward,” said Roddric Bell, Director for RMA’s Regional Office in Jackson. “Crop insurance is a crucial component in a tobacco farmer’s safety net. These changes help ensure the future of the program.”

Changes include:

• Expanding the contract provisions regarding price and quality adjustments to burley, fire-cured, dark air, and Maryland types of tobacco.
• Modifying quality adjustments for the fire-cured, dark air and Maryland types to use actual price received (quality adjustment for the burley type will continue to be based on the Agricultural Marketing Service (AMS) grades).
• Quality adjustment will only be available for the amount of tobacco grown under contract for burley, dark air, fire cured, and Maryland types of tobacco.

In an effort to increase consistency and clarity concerning how insurable tobacco types are determined, RMA also added language to the tobacco special provisions that will direct producers to the AMS regulations for the official definitions of insurable types of tobacco.

The changes impact Indiana, Kentucky, Maryland, Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia. The impacted states covered by the Raleigh Regional Office are Maryland, North Carolina, Pennsylvania, Virginia, and West Virginia.