The federal government is offering all Hawai'i farmers — from producers of bees to taro — a new type of insurance that covers unavoidable revenue shortfalls due to crop losses or commodity price declines.

The insurance at subsidized rates will be the first federal farm insurance made available to Hawai'i farmers not growing major crops, and is being launched one year after the U.S. Department of Agriculture initiated insurance for macadamia nuts, coffee, bananas, papaya and nursery products against weather and pest-related losses.

Previously, Hawai'i growers of more diversified crops — including many fruits, vegetables and livestock — couldn't obtain crop insurance because the market is too small for insurers to write policies for each crop.

"It's going to be a big change," said Kent Fleming, an extension economist with the University of Hawai'i College of Tropical Agriculture and Human Resources. "We don't have a history of crop insurance in Hawai'i."

The new product, called Adjusted Gross Revenue-Lite or AGR-Lite, will give some extra stability to what was a $456 million farm industry in Hawai'i in 2006, providing farmers who buy the insurance a guaranteed level of revenue in the event of significant price or production declines.

AGR-Lite has been available previously in 28 states, and is being expanded to Hawai'i and other states this year.

Dominic Kadooka, who runs a 40-year-old family sweet-corn farm on 52 acres in Waimanalo, said insuring against revenue losses is an interesting concept that could help farmers in bad years. "It sounds appealing," he said.

The insurance is available to farms with maximum annual gross revenue of a little over $2 million, and provides for a maximum $1 million loss payment.

Depending on the selected level of coverage, farms receive either 75 cents or 90 cents for every $1 in lost revenue up to 80 percent of total expected revenue.

So for a farm with $100,000 in annual revenue that for some unavoidable reason only generated $70,000 in a year, insurance would pay $7,500 or $9,000 for the $10,000 shortfall under the 80 percent threshold ($80,000) of total expected revenue. If the farm earned only $50,000, insurance would pay $22,500 or $27,000.

"It's really to smooth out the downs in business," Fleming said. "This makes it less risky."

The insurance doesn't provide 100 percent loss coverage, but the additional security it does provide is relatively inexpensive.

For example, a Big Island farm generating $100,000 a year with a mix of banana, avocado and basil insured up to 80 percent at 90 cents per $1 loss can expect an annual premium of about $2,600, of which the USDA pays roughly half.

"It's a good deal even if the government doesn't subsidize (the premium cost), and the government does subsidize it," Fleming said.

The insurance program is administered by the USDA's Risk Management Agency, which underwrites and subsidizes crop insurance policies sold and serviced by private insurance companies.

One anticipated drawback of the program for many local farmers is a requirement to provide five years of tax records and an annual farm report of production plans.

Many farmers, Kadooka said, don't want to bother with such paperwork and the application process.

To promote the revenue insurance program, UH will host seminars for interested farmers on the Big Island and O'ahu next month.

Presentations are not being held on Kaua'i or Maui because of budget constraints and poor turnout at the large-crop insurance program presentation previously.

There is a March 15 deadline to sign up for revenue insurance for the year, and applicants must be a U.S. citizen or resident to apply.