Big Wins on Whole-Farm Revenue Protection
October 5, 2022
In late August, the United States Department of Agriculture (USDA) Risk Management Agency (RMA) introduced a number of modifications to enhance the effectiveness of the Whole-Farm Revenue Protection (WFRP) program, the one insurance coverage product designed to guard a farmer’s complete operation, not only one crop. Building upon these enhancements, RMA simply introduced a Road Show that can start with two digital occasions this October and develop right into a sequence of digital and in-person occasions this fall to coach producers and crop insurance coverage brokers about WFRP. There has maybe by no means been a greater second for farmers to contemplate enrolling in WFRP.
WFRP is a novel crop insurance coverage product that gives producers nationwide the choice to insure the income of their complete operation, together with crop, livestock, and nursery manufacturing underneath a single coverage. It additionally features a built-in insurance coverage premium low cost for crop and enterprise diversification that considers its inherent danger discount affect.
WFRP, first licensed within the 2014 Farm Bill, has lengthy been championed by the National Sustainable Agriculture Coalition (NSAC) for its potential to encourage diversification and degree the enjoying discipline for producers underserved by different federal crop insurance coverage choices. The 2021 USDA Action Plan for Climate Adaptation and Resilience cites WFRP as a key program to assist farmers who use diversification to scale back danger and fight lowering agricultural productiveness.
Despite this potential, nationwide WFRP participation charges are low and enrollment tendencies usually are not favorable. Just 1,934 insurance policies had been offered to farmers in 2021, down by roughly 32 p.c from this system’s top in 2017. This is usually attributable to overly difficult paperwork burdens and different necessities, in addition to skepticism from each farmers and crop insurance coverage brokers. RMA launched a Micro Farm pilot in 2022, meant to scale back paperwork and enhance entry for the smallest direct-to-consumer producers, however the most permitted eligibility ceiling of $100,000 was too low to serve most native meals producers who stand to learn from WFRP.
NSAC has collaborated with RMA to handle these boundaries to entry and enhance farmer enrollment in WFRP because the program’s inception. Thanks partly to continued dialogue facilitated by NSAC, together with conversations with producers and insurance coverage brokers who promote WFRP, this 12 months RMA was in a position to introduce vital enhancements to this system. These enhancements ought to meaningfully tackle the paperwork burden which has traditionally prevented farmers from buying WFRP.
2023 Improvements to WFRP
NSAC applauds RMA for proposing a number of notable modifications to the Whole-Farm Revenue Protection program permitted by the Federal Crop Insurance Corporation Board of Directors on August 18. These new provisions, which go into impact within the upcoming 2023 crop 12 months, embody:
- Replacing current expense reporting procedures with a 40 p.c discount in anticipated income for commodities which can’t be planted as a result of insurable causes;
- Increasing the utmost permitted income for the Micro Farm program from $100,000 to $350,000;
- Adjusting yield reporting necessities on the gross sales cut-off date to streamline file holding and cut back general paperwork; and
- Increasing the utmost insurable income for WFRP from $8.5 million to $17 million, permitting extra producers to take part in this system.
NSAC expects that the substitute of current expense reporting procedures will show some of the impactful enhancements to WFRP because the program’s implementation. This change is in keeping with a longstanding NSAC suggestion to eradicate the expense reporting requirement, which locations an undue burden on all candidates, particularly small, undeserved, and native meals producers.
In apply, expense reporting has typically required producers to maintain exhaustive data of each sale revamped the course of a 12 months as proof of income. No different crop insurance coverage product requires this degree of recordkeeping, which is especially unrealistic for the various small, diversified, and direct-to-consumer farmers who depend upon extra frequent, small transactions day-to-day.
Tripling the utmost permitted income for the Micro Farm program from $100,000 to $350,000 is one other win aligned with NSAC suggestions. Initially, NSAC referred to as for the lowered reporting necessities from the Micro Farm pilot to use to all enrolled producers, or in need of that, for the eligibility ceiling to at the very least apply all small and mid-sized farms as much as $1 million. While RMA’s motion solely raises the ceiling by 1 / 4 of the quantity really helpful by NSAC, the elimination of the expense reporting requirement throughout the board successfully applies essentially the most helpful provision from the Micro Farm program to all WFRP enrollees. NASC awaits the chance to evaluate how an improved Micro Farm pilot will distinguish itself and create alternatives for producers with a most permitted income as much as $350,000 within the 12 months forward.
These reforms to WFRP are particularly well timed given the upcoming rollout of Phase 2 of FSA’s Emergency Relief Program (ERP), which is designed to distribute aid funds to farmers and ranchers impacted by pure disasters in 2020 and 2021. The second part of ERP shall be particularly geared toward aiding producers overlooked of current applications, on the situation that they buy insurance coverage or protection underneath the Noninsured Crop Disaster Assistance Program (NAP) for the following two obtainable crop years. With a streamlined paperwork burden, WFRP shall be a perfect choice for the small, numerous, natural, and in any other case underserved producers who obtain help from ERP.
Watch this video message from RMA Administrator Marcia Bunger sharing information of those vital enhancements to WFRP.
WFRP Education This Fall
This fall, RMA is launching a Whole-Farm Revenue Protection and Micro Farm Road Show with in-person and digital occasions throughout the nation. RMA consultants will present an in-depth take a look at these insurance policies and reply questions from farmers and brokers. With the latest modifications to considerably cut back the historic paperwork burden and streamline entry, and with worsening weather-related disasters throughout the nation, now is a perfect time for farmers to contemplate enrolling in WFRP.
The first two digital occasions to kickoff RMA’s Road Show shall be held on Tuesday, October 11, at 11:30am Eastern and Thursday, October 13, at 4pm Eastern. Check again right here for an up to date listing of in-person and digital occasions because the season progresses.
NSAC is grateful for RMA’s choice to double down on schooling for WFRP at this important second and strongly encourages members and farmers in our community to tune into or be part of WFRP outreach occasions hosted by RMA.
What’s on the Horizon?
NSAC appears ahead to continued collaboration with RMA to enhance Whole-Farm Revenue Protection, all the time ground-truthing our suggestions with farmers and ranchers and insurance coverage brokers with WFRP expertise. Indeed, even with these optimistic modifications, hurdles stay to ensure that WFRP to shed its damaging fame in farm nation.
Above all, within the coming 12 months NSAC hopes to see RMA prohibit the adjustment of worth and manufacturing expectations on the time of a loss declare. This is an alarmingly widespread apply which most frequently ends in the last-minute discount of the farmer’s indemnity fee and, in our expertise, is the first purpose why farmers drop WFRP protection.
In addition, NSAC helps provisions that may strengthen the diversification low cost constructed into WFRP. This is a singular characteristic amongst insurance coverage merchandise that pulls many producers to this system. Farmers routinely categorical that they expertise little or no low cost past three commodities or that they’re too numerous for the motivation to matter. And, lastly, NSAC advocates for RMA to replace its definition of Good Farming Practices to not disincentivize the adoption of conservation practices throughout insurance coverage merchandise.
This 12 months’s modifications, particularly when supplemented by the modifications and lively outreach to producers and brokers from RMA that we see on the horizon, could have the potential to cement WFRP as a contemporary and streamlined crop insurance coverage choice for all producers.
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