The Whole-Farm Revenue Protection (WFRP) insurance policy is aimed at diversified farms, including mixed grain and livestock operations, local food producers, organic farmers, farmers that grow specialty crops, animals and animal products, and others for whom single commodity insurance protection is not a good option. The WFRP policy is available nationwide and provides a risk-management safety net for all commodities on farms under one insurance policy.
WRFP insurance provides coverage against the loss of revenue that you expect to earn from all commodities produced on the farm or purchased for resale during the insurance period. This also includes animals and animal products and provides carryover loss coverage if you are insured the following year.
The amount of farm revenue you can protect with WFRP insurance is the lower of the revenue expected on your current year’s farm plan or your five-year historic income adjusted for growth. All commodities produced by the farm are covered under WFRP except timber, forest, and forest products, and animals for sport, show or pets. Christmas trees is considered a commodity produced on a farm. Specific commodities for each state and county are shown in Risk Management Agency’s Information Browser, which can be found at www.rma.usda.gov.
WFRP provides protection against the loss of insured revenue due to an unavoidable natural disaster (adverse weather, fire, insect, earthquake, wildlife), and natural disasters that impact market prices and other unexpected price declines during the insurance year.
The farm operation diversification is measured by the number of commodities on the farm. It is not just what you are growing or producing, but is a measure of farm diversification that shows the farm has reduced its risk by producing significant amounts of multiple commodities. For example, a farm may have 90 percent of its revenue coming from apples, 5 percent from spinach and 5 percent from carrots. For WFRP purposes, this farm would be considered to have only one commodity. However, commodities providing small amounts of revenue (spinach and carrots) may be grouped to meet the qualification. If the farm had 50 percent of its revenue coming from apples, 25 percent from spinach, and 25 percent from carrots, the farm would be considered to have 3 commodities.
WFRP provides maximum liability of $8.5 million and the protection coverage levels range from 50 to 85 percent in 5 percent increments of insured revenue. The farm must have diversification of at least three (3) commodities, in order to qualify for the 80 and 85 percent coverage levels. A whole farm premium subsidy of 80 percent for coverage levels of 50 to 75 percent is available when the farm grows two or more crops, and a basic premium subsidy from 55 to 67 percent for farms with one commodity. Beginning farmers may also qualify for an extra 10 percent premium subsidy.
WFRP covers livestock, nursery, and greenhouse plants with some limits. The revenue generated from these sources cannot exceed $1 million in expected revenues. Farms physically expanding or increasing capacity can increase their insurance guarantee by up to 35% of their average revenue history.
WFRP is covering revenue produced during the insurance year. A commodity not harvested or sold during the insurance period will count as a revenue. However, a commodity grown last year and sold this year is not covered. For animals, for example, if a calf is worth $600 at beginning of the year and is to be sold at $1500, the value insured will be $900. Inventory adjustments and Accounts Receivables are used to determine the ‘produced’ amounts.
Producers who choose WFRP cannot use ‘catastrophic’ level (CAT) risk protection coverage.
Producers may participate in both the WFRP and the Non-Insured Assistance Program (NAP). However, they may not receive benefits from both programs. Therefore, producers who do participate in both programs will be required to choose to receive either the NAP payment(s) or the WFRP indemnity. Regardless of the choice of benefits, the producer will be required to pay any premium and administrative costs due for WFRP as well as for NAP. For example, if a producer received one or more NAP payments during the year that totaled $15,000, and is later due a $25,000 indemnity under WFRP, the producer would need to pay back the NAP payments to the Farm Service Agency and receive a NAP Repayment Certification to complete the claim requirements under WFRP.
In order to purchase the WFRP insurance a producer will need to provide this information to the insurance agent:
- Five years of historic Schedule F farm tax records. For the 2018 year, tax forms from 2013-2017 are required, except for beginning farmers (three years only); fewer than five (5) years are required if you were not physically able to farm for one of the five years, but were farming the past year or if you are an exempt entity.
- Information about what will be produced on the farm during the insured year – Farm Operation Report.
- Information supporting expansion during the past few years – added acres, new varieties of planting, adding greenhouses, or anything else that expands production capacity, so the operation has the potential to produce up to 35 percent more revenue than the historic average.
- Acceptable sales records for direct marketed commodities are now records kept by the producer during the year (Contemporaneous Records)
- Any supporting information that shows that farm tax forms are accurate and were filed with the IRS.
Similar to other spring crop sales closing dates, the WFRP sales closing date is March 15, 2019.
WFRP is available for purchase from your local crop insurance agent who will assist you in completing the Intended Farm Operation Report. Claims are settled after taxes are filed for the insurance year. A loss under the WFRP policy occurs when the WFRP revenue-to-count for the insured year falls below the WFRP insured revenue.
Call your local Farm Service Agency office or log onto the Risk Management Agency website: http://www.rma.usda.gov/tools/agent.html to get contact information of local agents. The USDA, RMA fact sheet, and WFRP revised factsheet for 2019 are available at: https://www.rma.usda.gov/Fact-Sheets/National-Fact-Sheets/Whole-Farm-Revenue-Protection-2018