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Organic Farmers Crop-Insurance Costs Spoil Growth of $27 Billion Market

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Consumer demand for organic foods has helped Uncle Matt's Organic Inc. grow from 5 acres of oranges in 1999 to become Florida's biggest organic-citrus producer. Further expansion is being hampered by the federal crop insurance program designed to help farmers, says the company's founder, Matt McLean.

Organic producers pay a surcharge on many of those policies, and payouts often don't reflect their higher costs, which may inhibit farm development and contribute to shortages of some naturally grown products, producers and industry analysts say.

That reduced subsidy diminishes the incentive to meet surging market demands, said McLean, 40, who sells tangerines, grapefruit and other citrus crops grown on 1,110 acres owned by his family and 25 fellow farmers to retailers including Whole Foods Market Inc. and Kroger Co. (KR)

"We just want the same tools as conventional farmers to protect our assets," said McLean, a fourth-generation grower who returned to the business in Clermont, Florida, 25 miles west of Orlando, years after a 1983 frost wiped out his grandfather's trees. "It costs us more to grow." 


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