Whole-Farm Revenue Protection

by Thomas Moore, CFSA’s NC Food Systems Coordinator

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While attending Atina Diffley’s Wholesale Success workshop last month in Durham, NC, I was introduced to a valuable resource that can help new farmers mitigate risk of financial loss due to crop failure. The Risk Management Agency (RMA) within the US Department of Agriculture (USDA) is now running a Whole-Farm Revenue Protection Pilot Program. Through this program farmers with at least five years of experience (you may qualify with fewer years if you qualify for as a beginner farmer or rancher) can insure their entire farm at local fair market value. Crop value is not based on commodity pricing, which is a great benefit for organic growers. This program could be a huge help for local growers across the Carolinas and should be something to consider when it comes to risk management assessment.

 

The USDA has developed a program called USDA Whole-Farm Revenue Protection Insurance (WFRP) that allows farmers to have a risk management safety net that covers a diversity of crops under a single insurance policy. In addition, the USDA will subsidize up to 85% of your policy. The insurance plan allows farmers to insure 50%-85% of their whole farm revenue with up to $8.5 million in insured revenue. Coverage includes farms with specialty or organic commodities (crop and livestock) and those marketing to local, regional, farm-identity preserved, specialty, or direct markets.

 

Coverage:

WFRP protects your farm against the loss of farm revenue that you earn or expect to earn from:

  • Commodities you produce during the insurance period, whether they are sold or not;
  • Commodities you buy for resale during the insurance period; and
  • All commodities on the farm except timber, forest, forest products, and animals for sport, show, or pets.

 

The policy also provides replant coverage:

  • For annual crops, except those covered by another policy;
  • Equal to the cost of replanting, up to a maximum of 20 percent of the expected revenue; and when 20 percent or 20 acres of the crop needs to be replanted.

 

The number of commodities produced on the farm are counted using a calculation that determines:

  • If the farm has the diversification needed to qualify for the 80 and 85 percent coverage levels (there is a minimum 3-commodity requirement);
  • The amount of premium rate discount that you receive due to farm diversification; and
  • The subsidy amount. Farms with 2 or more commodities receive a whole-farm subsidy and farms with one commodity receive a basic subsidy.

 

WFRP Coverage Level: Required Commodity Count and Maximum Approved Revenue

Coverage Level

Commodity Count (Minimum Required)

Maximum Farm Approved Revenue

85%

3

$10,000,000

80%

3

$10,625,000

75%

1

$11,333,333

70%

1

$12,142,857

65%

1

$13,067,923

60%

1

$14,166,167

55%

1

$15,454,545

50%

1

$17,000,000

 

WFRP Subsidy: Percentage of Total Premium Paid by Government

Coverage Level

50%

55%

60%

65%

70%

75%

80%

85%

Basic Subsidy-Qualifying
Commodity Count: 1

67%

64%

64%

59%

59%

55%

N/A

N/A

Whole-Farm Subsidy-Qualifying
Commodity Count: 2

80%

80%

80%

80%

80%

80%

N/A

N/A

Whole-Farm Subsidy-Qualifying
Commodity Count: 3 or more

80%

80%

80%

80%

80%

80%

71%

56%

 

Program Benefits:

Some of the benefits WFRP include:

  • availability in every state and every county in the country;
  • crop-neutral revenue coverage for all crops and animals on a farm;
  • a premium subsidy of up to 80 percent when at least two crops are grown;
  • a premium discount for increased diversification;
  • replant coverage;
  • available coverage levels up to 85 percent of revenue;
  • coverage for expanding operations without expansion histories;
  • inclusion of some incidental processing expenses necessary to make the commodity ready for market, such as washing, trimming, and packaging; and
  • the ability to combine WFRP with single crop policies. 

 

Eligibility:

Eligibility for WFRP coverage requires you to:

  • Be eligible to receive Federal benefits;
  • Be a U.S. citizen or resident;
  • File either a Schedule F tax form or other farm tax form that can be converted to a Substitute Schedule F for a specified number of years;
  • Have no more than $8.5 million in insured revenue, which is the farm revenue allowed to be insured under the policy multiplied by the coverage level you select;
  • Have no more than $1 million expected revenue from animals and animal products;
  • Have no more than $1 million from greenhouse and nursery products;
  • Have no more than 50 percent of total revenue from commodities purchased for resale;
  • Have buy-up coverage levels on any Federal crop insurance plan you choose with the WFRP insurance plan;
  • Meet the diversification requirements of the policy by having two or more commodities, if a commodity you are raising has revenue protection or actual revenue history insurance available; and
  • Meet the diversification requirements of the policy by having two or more commodities, if there are potatoes on the farm.

 

Important Dates:

Sales Closing, Cancellation, & Termination Dates:

  • Specific to your county: January 31, February 28, or March 15

Revised Farm Operation Report Dates: Based on your tax filing date

  • Calendar year or early fiscal year filer: July 15
  • Late fiscal year filer: end of the month that you file, but no later than October 31

Contract Change Date:

  • On or before August 31 of the year before your insurance coverage begins

 

How to Apply for Services:

Contact your local crop insurance agent about purchasing the WFRP policy.

Your local crop insurance agent can be found here: RMA Agent Locator

 

Additional Resources:

USDA-RMA Whole-Farm Protection policy website

Whole-Farm Revenue Protection Pilot Handbook (2017)

Whole-Farm Revenue Protection Fact Sheet (2016)

Whole-Farm Revenue Protection FAQs

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