Historic Changes to Whole Farm Revenue Protection


Alix-pics-for-spring-2011-021-150x150Today the Risk Management Agency of the U.S. Department of Agriculture announced historic changes to Whole Farm Revenue Protection (WFRP), including expanded access to beginning farmers and nationwide availability. These changes will be effective starting in the 2016 crop year.

The list of WFRP changes for 2016 includes:

  1. Expansion to every state and every county. Previously the policy had been available in 45 states and most counties in those states.
  1. Expanded access for beginning farmers, enabling them to take part if they started farming in 2012 or earlier. The provision allowing coverage for new farmers that take over 90 percent of an existing operation is retained.
  1. The elimination of the 35 percent limit on expected revenue from animals and animal products, and greenhouse and nursery crops. An overall cap of $1 million on revenue from these sources remains in place.
  1. The streamlining of record keeping requirements for farmers that market directly to the public, to make the policy more straightforward.
  1. The ability of farmers to maintain eligibility if a year of tax records is missing as a result of illness or military deployment.
  1. The ability of tax-exempt organizations, such as tribes, to qualify if they have appropriate records to substitute for tax records.
  1. Increasing the ability of expanding operations to obtain increased coverage.

 

Why Does RAFI Work on Crop Insurance?

RAFI has a long history of working on crop insurance. We do this work not only because crop insurance can help farmers survive severe weather and manage risk, but because it can also pave the way to other risk management tools, most notably agricultural credit. Historically, crop insurance has best served commodity growers in the Midwest, but we work to ensure that it serves a diverse set of farmers including commodity growers but also specialty, organic, direct market, and diversified farmers. In short, we aren’t advocating for crop insurance, we’re advocating for farmers.

What Makes WFRP Special?

RAFI began working on reforms to WFRP (and its predecessors AGR and AGR-lite) insurance nearly a decade ago. WFRP insurance has the unique ability to cover diversified operations without requiring different insurance policies for each crops. Whole-farm insurance has historically provided a premium discount to farms with significant amounts of the farm income spread across multiple crops. Reform of WFRP was a priority for RAFI because these features make it an improved option for diversified farms, both established or transitioning.

Why Are the 2016 Changes So Important?

The first iteration of WFRP expanded the availability and coverage options beyond what AGR and AGR-lite provided. Important changes however, were still needed to open access to beginning farmers and expand access to farms that incorporate livestock into the operation. The changes announced today address both of these needs. The comparative chart below has been updated to show how WFRP in 2016 compares to AGR and AGR-lite.

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As the chart indicates, WFRP provides unprecedented access to beginning farmers and livestock farmers.

Farmers interested in signing up for WFRP will have the opportunity beginning September 1, 2015. Farmers will sign up through a local crop insurance agent, who can be found through the USDA. Farmers can begin reviewing further information about the policy by reading the USDA fact sheet about WFRP.

If you have additional question about WFRP or crop insurance in general, contact James Robinson, Research and Policy Associate at RAFI, at james@rafiusa.org or 919-542-1396 ext. 209.