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Marine Extension Bulletin
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Important Changes to the Federal Crop Insurance Program for Quahog Farmers
November 2004

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In the fall of 1999, the United States Department of Agriculture (USDA) Risk Management Agency (RMA) launched a pilot crop insurance program for quahog (hard shell clam) farmers. The program was open to quahog farmers in select counties in Massachusetts, Virginia, South Carolina, and Florida. Under this pilot program, quahog growers could insure a portion of their clam crops under the Federal Crop Insurance Corporation (FCIC), just as farmers of barley, peanuts, wheat, and other crops do.

Although participation in the program was good initially, farmers discovered a flaw in the pilot insurance program; farmers complained that losses were measured from their total inventory. In practice, however, most losses tend to be associated with a single year class. The pilot program’s loss calculation method prevented a number of farmers from collecting payments, despite heavy losses in one year’s crop.

ice on water
Ice poses a threat to clam farmers.
Photo by Mark Begley

In response to the concerns expressed by quahog farmers, RMA made significant changes to the pilot program. Specifically, the program now recognizes two types, or stages, of quahogs, and losses are calculated and insured for each of these stages. Grower feedback also convinced RMA that stages should be defined based on quahog age. For example, Stage 2 clams are defined as clams seeded after July 15th of the most recent crop year and including clams seeded in the current year. Stage 3 clams are defined as those seeded before July 16th of the most recent crop year. This change has a dramatic effect on the ability of quahog farmers to collect in the event of loss (see Scenarios, below) and should prompt growers to reconsider their crop insurance coverage prior to the annual sales closing date of November 30th.

Scenario Assumptions
To illustrate the differences between the old and new pilot programs, two scenarios have been created. For both scenarios, a small clam farm in Massachusetts will serve as the basis for comparison. The farmer plants 100,000 clams each year, beginning in 2002:

Year Planted: 2002
Number of Clams Planted: 100,000
Clam Stage:Stage 3

Year Planted: 2003
Number of Clams Planted: 100,000
Clam Stage:Stage 3

Year Planted: 2004 (planted after July 15th)
Number of Clams Planted: 100,000
Clam Stage:Stage 2

Based on advice from quahog farmers, a 60% survival rate is assumed by the insurers. This means that the program expects a farmer typically to lose 40% of each crop and these clams are not insurable. The value of the clams is set for each state’s farmers; currently in Massachusetts, Stage 3 clams are worth $0.18 each and Stage 2 clams are worth $0.09 each. Under the old program, all clams were valued at $0.18 each.

NOTE: Though crop values may differ for farmers in other states, and quantities planted will vary, the payment patterns in the following scenarios would still apply.

quahog farmers on flats
Farmers pin down a net over their quahog seed as the tide starts coming in.
Photo by Diane Murphy, Cape Cod Cooperative Extension

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