On October 3, USDA’s
Risk Management Agency (RMA) announced that
premium subsidy levels established for the new Whole-Farm Revenue Protection (WFRP) crop insurance
policy will be in line with the premium subsidies available to producers
selecting whole-farm units under the Revenue Protection plans of
insurance. If a farmer has two or more crops and meets the minimum
diversification requirement they will receive the higher premium subsidy.
This is an important
step to level the playing field for diversified farmers. Until now,
farmers purchasing the previous AGR and AGR-Lite policies have had the lower
basic subsidy rate available, regardless of the number of commodities
insured. Now, with today’s announcement, those purchasing WFRP (the
successor to AGR and AGR-Lite) and meeting the diversification requirements for
two commodities, will be eligible for the higher whole-farm subsidy levels
available on Revenue Protection products.
On coverage options
between 50 and 75 percent, the new subsidy rate will be 80 percent. Like
with other individual crop policies, the subsidy level declines at the very
highest coverage levels.
NSAC championed Whole
Farm in the Farm Bill and has worked hard to help see this product through to
completion. NSAC commends RMA on this announcement and looks forward to
the full roll out of WFRP in mid-November. We concur with RMA
Administrator Brandon Willis who, in making the announcement, said: “Whole-Farm
Revenue Protection insurance will expand options for specialty crop, organic
and diversified crop producers, allowing them to insure all the crops at once
instead of one commodity at a time. That gives them the option of promoting
crop diversity and helps support the production of a wider variety of healthy
foods.”
WFRP Policy Basics
Unlike traditional crop
insurance, WFRP allows producers to insure the value of all of their crops,
including mixed grain/livestock operations and diversified fruit and vegetable
farms, rather than insuring crop-by-crop. This makes the policy an
especially attractive option for diversified farms with resource-conserving
crop rotations, integrated grain and livestock systems, specialty crop growers,
and organic producers.
In many cases individual
crop policies do not exist for the crops these farmers grow and even if one
does it is often not be available in the state or county where the farmer is
located.
WFRP is intended to
improve upon the existing adjusted gross revenue (AGR) protection policies
known as AGR and AGR-Lite.
These two products have been lightly used since AGR was first introduced in
1999.
WFRP will have an
increased liability limit ($8.5 million, compared to AGR’s $6.5 million and
AGR-Lite’s $1 million), will offer higher levels of coverage (up to 85
percent), and will include a premium discount for increased crop
diversification.
It is also expected to
cover incidental costs that are necessary to make a product ready for market,
such as washing, trimming, and packaging.
The 2014 Farm Bill authorized the
U.S. Department of Agriculture to develop WFRP in time for the 2015 crop
year. The policy was approved by the Federal Crop Insurance Corporation
Board of Directors in May
and the full details of the policy are expected to be released in Mid-November.
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