The farm bill Conference Committee has the opportunity to move forward important changes to Whole-Farm Revenue Protection (WFRP) crop insurance present in both the House and Senate versions of the farm bill.
According to the USDA, “WFRP provides a risk management safety net for all commodities on the farm under one insurance policy and is available in all counties nationwide. This insurance plan is tailored for any farm with up to $8.5 million in insured revenue, including farms with specialty or organic commodities (both crops and livestock) or those marketing to local, regional, farm-identity preserved, specialty, or direct markets.”(1)
WFRP provides an important risk management option to entrepreneurial farmers selling either specialty products without existing coverage or products sold into high-value markets that has long been available to those selling at conventional, wholesale prices. WFRP encourages the risk-reduction benefit of diversification and provides risk management for creative entrepreneurship and marketing that is critical for the vitality of small and mid-scale farms.
While the use of WFRP has increased rapidly since its introduction in 2015 (2), with 2,842 policies sold in 2017 covering over $2.8 billion in farm income, our experience with producers has shown a series of issues slowing adoption. These include:
- difficulty for both farmers and crop insurance agents in understanding the specifics of the program and how losses are determined,
- increased time needed from agents for processing applications relative to other policies, and
- difficulties with coverage levels not reflecting actual potential income including addressing farm expansion and the effect of disaster years on insurable average income levels.
The House version of the farm bill provides an important change to Whole Farm Revenue, changing the definition of beginning farmer to farming for 10 or fewer years. Because WFRP requires 3-5 years of IRS Schedule F, the previous definition of five years essentially eliminated beginning farmer benefits for farmers accessing WFRP. We encourage the Conference to adopt this change from the House bill.
The Senate version provides a series of important improvements including:
- development of an improved method for addressing disaster years in determining average gross income,
- improved coverage for rapidly-expanding operations,
- improved agent training and outreach,
- reconsideration of the coverage caps on livestock income, and
- simplification of the program to increase flexibility and effectiveness.
WFRP is an innovative pilot crop insurance program, and the above changes are common-sense reforms that address the concerns of farmers who have tried to access the program. We urge the Conference Committee to adopt these recommendations.
Take Action! For information on how you can contact your legislators and ask them to support these changes for the farm bill, click here.
Learn more:
- USDA Risk Management Agency Whole-Farm Revenue Protection Pilot Program (WFRP)
- RAFI’s summary of Whole-Farm Revenue Protection (WFRP)
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Citations:
- USDA Risk Management Agency Whole-Farm Revenue Protection Pilot Program (WFRP)
- WFR was created in the 2014 Farm Bill. WFR was a reform of Adjusted Gross Revenue and AGR-Lite crop insurance that were introduced in 1999 from a pilot program in PA.
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