Cotton Management Economic Notes, Volume 4, No. 1

Abstract

On October 13, 1994, President Clinton signed into law the Federal Crop Insurance Reform Act. This Act has important implications for Arizona growers even though Arizona has historically had very low participation in even multiperil crop insurance. The main reason Arizona growers will find it beneficial to obtain crop insurance at a minimum level relates to farm program benefits. In order for a producer to be eligible for any price support or production adjustment programs (e.g., deficiency payments, loan rate). Catastrophic (CAT) coverage is the minimum level of insurance needed to be eligible for these benefits. New Farmers Home Administration loans that are of operating, farm ownership, or emergency status also require CAT coverage for insurable crops. Note that the deadline for purchasing crop insurance is earlier than commodity program signup deadlines. The deadline for signup is February 28 for both Upland and Pima.