Now is the time to call your insurance agent!
If you have been in any of RAFI-USA’s workshops, seen our disaster resources or gotten our materials, chances are you have heard about Whole Farm Revenue Protection Crop Insurance (WFRP). This is the crop insurance policy that provides protection for the farmer’s whole income, rewards crop diversity, recognizes the farmer’s price, and generally provides coverage for diversified farms selling into high value markets that was never available before.
In our work on disasters over the years, we can say that WFRP saves farms. No question. And if you think it might work for you, right now is the time to find out.
The deadline for signing up for WFRP is February 28th for states across the South. March 15th further North, but check with your insurance provider to make sure. Also, if you are applying for WFRP for the first time, it can be complicated to get the paperwork in order, so you don’t want to wait until the last minute!
As a reminder, WFRP provides coverage based on the 5-year average of your gross income from your IRS Schedule F or a minimum of three years’ averages if that is how long you have been farming. The coverage calculation can include a growth factor so that you are not limited by what you produced in the past. Also, the level of premium subsidy for WFRP (the share of the cost of the insurance covered by the government) is up to 80%, so it can be very cost effective. Farmers who produce more than three commodities receive the highest levels of coverage and subsidy. For details, see the fact sheets and other information here.
WFRP is not for everyone. Highly diversified farms with income evenly spread throughout the year may not have vulnerability to specific disasters that warrants crop insurance coverage. But it is worth thinking through and checking out. Farmers who have one or two crops that bring in a significant part of their income or who have a specific time of year that much of their income comes in should strongly consider it. And those who have significant loans, especially operating loans, need to take a hard look at it too.
To apply, get in touch with a crop insurance provider who is familiar with WFRP. You can start with whomever sells you other insurance and ask them for a recommendation, but be sure to find someone who understands the WFRP policy. Also, USDA has an agent finder database on their website here.
When you meet with the crop insurance agent, you will need those 5 years of schedule F forms from your taxes and farm records showing how much income came from different crops. You will also need to show a plan for your income for this coming year. The agent should be able to work with you to get it all into the right form.
If you want to see how much it might cost, you can go to the USDA Crop Insurance Premium Calculator here. For instance, an operation with an average gross revenue of $400,000 that planned to bring in $400,000 with tomatoes, strawberries, greenhouse / nursery, cut flowers and other mixed vegetables would have an 85% coverage level of $340,000 that would cost the producer $18,251. An 80% level, covering $320,000, would cost $10,301. Keep in mind that these are estimates. Different crops have different levels of risk and so have different costs, so it is best to work through it with your insurance agent. And if you look at the cost estimator, look at the tab that says Producer Premium Amount. That is what you would pay.
We also want to hear from you about your experience with WFRP. We worked with many partners to help create this program to fill the need that we were hearing from entrepreneurial farmers. If the policy doesn’t work for you, or if it does, please let Scott know at [email protected]! We will work hard to make it even better.
But if you have even thought that maybe this might be for you, NOW IS THE TIME.
Questions? Contact Scott Marlow – [email protected] or 919-542-1396, ext. 2210.