On August 20, 2020, the Federal Crop Insurance Corporation (FCIC) approved new updates to the Whole Farm Revenue Protection (WFRP) program. WFRP is a unique 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. It is also the only crop insurance option that is available in every county in the country. 

Background 

WFRP was first authorized in the 2014 Farm Bill and became commercially available for the first time in 2015. NSAC played an instrumental role in the establishment of the program, and continues to engage with Congress and the Risk Management Agency (RMA) by amplifying farmer concerns and comments, and offering recommendations on ways to expand and improve the program. As a part of NSAC’s continued advocacy to improve WFRP, we convened stakeholder meetings in April 2019 and March 2020 between RMA WFRP staff, farmers, and NSAC member organizations to discuss ways to improve the program. These in-person meetings at RMA headquarters in Kansas City, MO, were followed by  stakeholder-informed, written recommendations to increase use of the program, especially by the small-scale and diversified producers the program was designed to serve. 

The 2018 Farm Bill directed RMA, the USDA agency that governs the federal crop insurance program, to solicit stakeholder feedback and consider several options to increase the flexibility and effectiveness of WFRP. Those options include: 

• Removing livestock and nursery production coverage caps
• Allowing waivers for operations to expand past the current expansion limit
• Reducing application paperwork and simplifying recordkeeping
• Developing simpler alternative recordkeeping techniques for documenting planting and production history
• Finding better options for moderating the impact of disaster years on coverage levels
• Improving insurance agent training to better reach the small farm sector and underserved regions

Last August, the FCIC approved six changes to WFRP, enacting several of the suggestions from the 2018 Farm Bill and four NSAC recommendations. The changes included:

• Moderating the impact of disaster years on historic farm revenue
• Excluding disaster payments and other state and federal program payments from both revenue-to-count and allowable revenue, decreasing volatility in a farmer’s historic farm revenue and related underinsurance and higher premium costs
• Allowing a producer to participate in both WFRP and the Noninsured Crop Disaster Assistance Program (NAP) at the same time
• Raising the livestock and nursery cap from $1 million to $2 million

These changes went into effect for the 2020 crop insurance year, which began in August 2019. Details on those changes can be found here. 

2021 Update

For the 2021 crop insurance year, a new commodity code will be available for producers who sell to direct markets. Commodity codes are classifications for specific crops that are tied to actuarial data, a key component for determining risk for insurance. Under the new commodity code, producers can insure the revenue from direct market acres, acres whose production is sold directly to consumers,  if they grow two or more commodities on those acres. Previously, each commodity grown had to be reported under its own code, which required additional recordkeeping. Now, producers only have to provide a receipt at the end of the year to show what they made from the direct market acres. Producers will have to remove any uninsurable revenue, like bottled water or value added products from a farm stand, from the total.  The direct-market commodities will count as two commodities, allowing producers to access the diversification premium rate discount, one of WFRP’s unique  benefits. 

With the new commodity code, RMA will require a three year revenue history based on reported revenue from the combined direct market commodities and total acres planted of those commodities. This history can come from sales receipts and other records, even if the records don’t meet the current RMA recordkeeping requirements. The expected price can be adjusted from year to year as the commodities grown on the direct market acres change. 

What the changes mean

The creation of the new direct market commodity code is designed to reduce the paperwork burden for producers who sell into direct markets. Previously, the requirements for reporting yield and revenues for each commodity grown was difficult for direct market producers who sold commodities collectively, like through a roadside stand. Additionally, AIP interpretation of the WFRP Handbook, which details the nitty gritty of how the policy functions, required direct market producers to meet the high bar of providing daily sales records. 

The direct market commodity code could be a helpful tool that increases access to WFRP for direct market producers. The true effectiveness of the new code will depend on the details written in the WFRP Handbook. The Handbook is updated by RMA WFRP staff every year following the release of program updates. The relationship between RMA, a government agency,  and AIPs, private insurance companies, allow significant flexibility to AIPs and individual agents in their interactions with producers. This flexibility can be abused by agents and AIPs to require additional records from producers, replacing the burden of paperwork that the new commodity code is designed to lift. The language of the handbook should provide guardrails to preserve the intent of the direct market code. NSAC will submit recommendations to RMA on language for the WFRP Handbook to help ensure  the new direct market commodity code achieves the purpose of improving access to WFRP for direct market producers.

Moving WFRP forward

There are several recommendations that RMA can adopt to continue improving access to WFRP for diversified producers. Increasing agent familiarity with and understanding of WFRP is important. Although agents are required to offer the policy, it is not uncommon for producers to report that agents refuse to offer the policy or actively discourage them from purchasing it. Agent training is a key factor of improving producer enrollment in WFRP.  Further simplifying recordkeeping by allowing National Organic Program Organic Systems Plans to be used to report yields, sales, and expenses; eliminating expense report requirements; and focusing recordkeeping on major crops that contribute greater than 10 percent of a producer’s  total sales would also lower the barrier of entry for diversified producers. NSAC will continue our advocacy and engagement with Congress and RMA to improve WFRP and increase access to the program for diversified producers.