WHOLE-FARM REVENUE PROTECTION FOR DIVERSIFIED FARMS


Helping sustainable and organic producers manage risks on diversified farms

All farmers deserve access to an adequate farm safety net to protect against the inherent risks of farming, no matter if they are growing thousands of acres of organic grain or a few dozen vegetable crops for their local CSA. Whole-Farm Revenue Protection (WFRP) is a crop-neutral revenue insurance policy designed to protect a farmer’s entire operation, not just one crop. Under this policy, diversified farms that might not have access to separate crop or revenue insurance policies for each crop they grow can insure all their crops and livestock under one policy.

Learn More About the New Whole Farm Crop Insurance:

Program Basics

Insurance for farmers typically comes in two forms – yield insurance and revenue insurance. Yield-based insurance policies provide indemnity payments when crop yields drop below an insured amount, as long as the reason for the low yield is an insured cause of loss (e.g., drought, excess rain, etc.). Revenue insurance is similar but insures against drops in price as well as yield (since prices can drop when yields are high). Most policies sold today are revenue policies. Traditional crop-based policies insure individual crops, including some organic crops, but are not available for every crop in every county. WFRP, by contrast, insures all crops (and significant quantities of livestock) in every county in the country.

The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) develops crop insurance policies, sets premium rates, and subsidizes the costs for farmers and approved insurance providers. The federal policies are then administered through private crop insurance agents who sell the policies to individual farmers.

WFRP is a crop-neutral revenue insurance product available for diversified farming operations. Unlike traditional yield or revenue insurance, this product is not intended for a single specific crop, but for all the crops and livestock grown or raised on a given farm.

The WFRP policy was first made available in the 2015 insurance year. For diversified specialty crop growers, mixed grain and livestock producers, and other diversified and organic producers, WFRP provides an insurance option that recognizes and rewards the risk management inherent to diversified operations.

Benefits WFRP include:

  • Availability in every state and every county in the country
  • Crop-neutral revenue coverage for all crops and animals (up to $2 million in sales for animal production) on a farm
  • Premium subsidy of up to 80 percent when at least two crops are grown
  • An additional 10 percent premium discount for farmers and ranchers who have been farming or ranching for less than ten years
  • Progressively larger premium discounts for increased diversification starting from three and up to seven crops
  • Replant coverage
  • Coverage levels in five percent increments up to 85 percent of revenue
  • Coverage for expanding operations, currently capped at 35 percent per year
  • Inclusion of some incidental processing expenses necessary to make the commodity ready for market, such as washing, trimming, and packaging
  • Ability to combine WFRP with single crop policies and with the Non-Insured Crop Disaster Assistance Program (NAP)

The full details of the policy are available on RMA’s Whole-Farm Revenue Protection webpage and in the form of a webinar presented by NSAC, RAFI-USA, and NCAT about WFRP.

Beginning in the 2020 crop insurance year, the following six changes to WFRP will go into effect, all designed to increase the benefit of the program to farmers:

  • The increase in the limit on livestock and nursery production from $1 million to $2 million.
  • The ability to now participate in both WFRP and the Noninsured Crop Disaster Assistance Program (NAP) at the same time.
  • The exclusion of disaster payments and other state and federal payments in the calculation of payment after a claim, which can artificially lower the payment a farmer receives.
  • The addition of three options, which can be combined, to moderate the negative impact of disaster years on the five-year historic farm revenue that is used to calculate coverage:
    • Every year with yields below 60% of average is replaced with 60% of the producer’s simple average,
    • The lowest year is dropped out of the average, and
    • Approved revenue for the current year is set no lower than 90% of the previous year.
  • The adjustment of the calculation method for determining an operation’s growth trend to yield more accurate expected growth predictions.
  • The creation of coverage for hemp under specific conditions:
    • It must be produced in compliance with the applicable state, tribal, or federal plan.
    • It must be grown under a marketing contract.
    • It is not eligible for replant payments.
    • “Hot” hemp (when THC concentrations spike above 0.3 percent due to crop stress or cross-pollination) will not be considered an insurable loss at this time.

Eligibility

Whole-Farm is the only crop insurance policy available in every state and every county in the country, but it has different closing dates based on which part of the country the farm is in. Check with your local crop insurance agent about your closing date; they vary from the end of January through March of each year.

In order to participate in WFRP, a producer must have five consecutive years of Schedule F or other farm tax forms. For beginning farmers or ranchers, only three years of farm tax forms is required. For producers without a production history, it is possible to use a percentage of the county production average to calculate coverage, although the coverage level will be lower.

The Program in Action

Prior to the creation of WFRP, RMA offered Adjusted Gross Revenue (AGR) and AGR-Lite policies, which shared some aspects in common with WFRP. Relative to AGR and AGR-Lite, participation in WFRP has increased nationally. For instance, in 2014, the last year for AGR and AGR-Lite, 840 policies were sold representing $525 million in total liabilities. In 2017, the third year of WFRP, 2,835 policies were sold representing $2.8 billion in liabilities. The numbers decreased slightly in 2018, with 2,537 policies sold representing $2.6 billion in liabilities, but WFRP is still significantly outpacing its predecessors. The approved changes to the program should make it more beneficial and easier for producers to participate.

Since 2015, farmers of all kinds have been turning to Whole-Farm to better manage risk on their farms. Examples of types of farms that stand to especially benefit from WFRP include:

  • Diversified farms of all kinds, including fruit and vegetable operations, and farms that are transitioning to a more diversified cropping system
  • Farms with extensive grain, oilseed, and forage rotations
  • Farms focused on local food markets
  • Organic producers of all types, especially those who grow crops without organic price elections (the ability to insure a crop at the organic price) or with highly diversified systems
  • Integrated crop and livestock operations

Read more about WFRP and other crop insurance policy updates on NSAC’s blog:

How to Apply and Program Resources

Farmers interested in signing up for WFRP can speak to a local crop insurance agent about purchasing a new policy, contact a Regional or County RMA office with any questions, or review RMA’s online materials. NSAC has also partnered with several of our members to produce a webinar explaining WFRP policy, which is free to view online: NSAC, Rural Advancement Foundation International (RAFI), and National Center for Appropriate Technology (NCAT) Webinar on WFRP.

NCAT has also published resources on WFRP:

RMA publishes an annual fact sheet for WFRP and a bulletin detailing any changes to the policy that year. The most recent RMA program details include:

Farmers can also find more information on RMA’s Whole-Farm Revenue Protection policy website or review the RMA resources below.

Program History, Funding, and Farm Bill Changes

NSAC has long championed the need for risk management products that are appropriate for highly diversified farms. Crop and revenue insurance policies have long existed for agricultural monocultures, but only recently for diversified operations.  The lack of appropriate insurance policies has kept diversified growers uninsured or underinsured and at a competitive disadvantage. Whole-farm crop insurance was originally introduced as part of the Local Food, Farms, and Jobs Act (which NSAC championed) in an effort to correct this disparity, and parts of that legislation were ultimately included in the 2014 Farm Bill.

The 2014 Farm Bill authorized USDA to develop a new whole-farm revenue protection policy. The corresponding policy was subsequently approved by the Federal Crop Insurance Corporation’s (FCIC) Board of Directors in May 2014 and the full policy was released on November 6, 2014.

In 2015, RMA released a series of modifications to the program for the 2016 crop year. Modifications for the following crop year are typically released in August of each year, including the modifications for 2017, 2018, and 2019 crop years.

The 2018 Farm Bill updated the definition of “beginning farmer or rancher” with respect to WFRP, expanding it to include producers who have not been operating for more than 10 years. This definition shift brings WFRP in line with the standard USDA definition, and will make it possible for more beginning farmers to receive a 10 percent premium subsidy bonus when participating in WFRP.

The 2018 Farm Bill also directs the FCIC to hold stakeholder meetings to solicit producer and agent feedback on ways to improve the program. The farm bill also requires the FCIC Board to review procedures to increase flexibility and effectiveness. The factors that the Board must consider include: removing caps on nursery and livestock production, moderating the impacts of disaster years on historic revenue, and improving agent training and outreach to underserved regions and sectors such as small dairy farms.

Authorizing Language

Section 11022(7) of the Agricultural Act of 2014 amends Section 522(c) of the Federal Crop Insurance Act (7 U.S.C. 1522(c)) to be codified at 7 U.S.C. Section 1522(c). Section 11122 of the Agricultural Improvement Act of 2018 further amends the same Section of the FCIA.


Last updated in July 2019.