On August 30th, the USDA Risk Management Agency announced a series of changes to the Whole-Farm Revenue Protection Crop Insurance Policy (WFRP) for the 2020 crop year. These changes are an important step in addressing a series of issues that RAFI-USA and our partners have raised with USDA based on our direct work with farmers participating in the policy. We thank USDA for taking this step and for their continued commitment to this important policy.At a time when farmers are facing very real challenges from low commodity prices, USDA data shows that access to specialty markets other than conventional commodity markets increases farm viability across farm scales. WFRP is a critically important tool for farmers who are shifting to higher-value markets, both for risk management and access to credit. WFRP provides crop insurance coverage based on a 5-year average of gross farm income, and allows the farmer to obtain insurance based on their price in the marketplace. With increased subsidy levels based on diversity of income sources, it is also the only crop insurance policy that rewards the risk management benefits of crop diversification. The changes made by USDA include:
- An increase to the limit of allowable income from livestock and nursery from $1M to $2M, and allowance that livestock or nursery income in excess of that amount does not eliminate eligibility for the policy.
- A series of steps to address the impact of disaster years on historical revenue levels, including the opportunity to exclude or substitute disaster years and a limit in the amount that the historical income can drop in a single year. These provisions have been available in other revenue-based crop insurance policies over time.
- Clarification that disaster and other program payments would be excluded from historic allowable income and revenue-to-count in calculation of insurance payments. In the past, these payments counted as revenue-to-count, but not in the calculation of historic allowable income.
- Changes to the indexing calculations in growth of operations. These calculations are used to determine how much a farmer’s insured income can grow based on past growth.
- Participation in the Non-insured Crop Disaster Assistance Program (NAP) will no longer eliminate eligibility for WFRP participation, shifting NAP benefits to revenue-to-count. This allows the farmer to nest NAP coverage within WFRP coverage, like they can with other crop insurance policies.
- Provisions allowing for coverage of hemp income in WFRP based on production contracts, so long as the producer abides by federal, state and local regulations. Losses from hemp registering THC levels over the legal limit are not an insurable loss.