In late August, the United States Department of Agriculture (USDA) Risk Management Agency (RMA) announced several changes to improve the effectiveness of the Whole-Farm Revenue Protection (WFRP) program, the only insurance product designed to protect a farmer’s entire operation, not just one crop. Building upon these improvements, RMA just announced a Road Show that will begin with two virtual events this October and develop into a series of virtual and in-person events this fall to educate producers and crop insurance agents about WFRP. There has perhaps never been a better moment for farmers to consider enrolling in WFRP.
Background
WFRP is a novel crop insurance product that offers producers nationwide the option to insure the revenue of their entire operation, including crop, livestock, and nursery production under a single policy. It also includes a built-in insurance premium discount for crop and enterprise diversification that considers its inherent risk reduction impact.
WFRP, first authorized in the 2014 Farm Bill, has long been championed by the National Sustainable Agriculture Coalition (NSAC) for its potential to encourage diversification and level the playing field for producers underserved by other federal crop insurance options. The 2021 USDA Action Plan for Climate Adaptation and Resilience cites WFRP as a key program to support farmers who use diversification to reduce risk and combat decreasing agricultural productivity.
Despite this potential, national WFRP participation rates are low and enrollment trends are not favorable. Just 1,934 policies were sold to farmers in 2021, down by roughly 32 percent from the program’s height in 2017. This is generally attributable to overly complicated paperwork burdens and other requirements, as well as skepticism from both farmers and crop insurance agents. RMA introduced a Micro Farm pilot in 2022, intended to reduce paperwork and improve access for the smallest direct-to-consumer producers, but the maximum approved eligibility ceiling of $100,000 was too low to serve most local food producers who stand to benefit from WFRP.
NSAC has collaborated with RMA to address these barriers to access and improve farmer enrollment in WFRP since the program’s inception. Thanks in part to continued dialogue facilitated by NSAC, including conversations with producers and insurance agents who sell WFRP, this year RMA was able to introduce significant improvements to the program. These improvements should meaningfully address the paperwork burden which has historically prevented farmers from purchasing WFRP.
2023 Improvements to WFRP
NSAC applauds RMA for proposing several notable changes to the Whole-Farm Revenue Protection program approved by the Federal Crop Insurance Corporation Board of Directors on August 18. These new provisions, which go into effect in the upcoming 2023 crop year, include:
- Replacing existing expense reporting procedures with a 40 percent reduction in expected revenue for commodities which cannot be planted due to insurable causes;
- Increasing the maximum approved revenue for the Micro Farm program from $100,000 to $350,000;
- Adjusting yield reporting requirements at the sales closing date to streamline record keeping and reduce overall paperwork; and
- Increasing the maximum insurable revenue for WFRP from $8.5 million to $17 million, allowing more producers to participate in the program.
NSAC expects that the replacement of existing expense reporting procedures will prove one of the most impactful improvements to WFRP since the program’s implementation. This change is consistent with a longstanding NSAC recommendation to eliminate the expense reporting requirement, which places an undue burden on all applicants, especially small, undeserved, and local food producers.
In practice, expense reporting has often required producers to keep exhaustive records of every sale made over the course of a year as proof of revenue. No other crop insurance product requires this level of recordkeeping, which is particularly unrealistic for the many small, diversified, and direct-to-consumer farmers who depend on more frequent, small transactions day-to-day.
Tripling the maximum approved revenue for the Micro Farm program from $100,000 to $350,000 is another win aligned with NSAC recommendations. Initially, NSAC called for the reduced reporting requirements from the Micro Farm pilot to apply to all enrolled producers, or short of that, for the eligibility ceiling to at least apply all small and mid-sized farms up to $1 million. While RMA’s action only raises the ceiling by a quarter of the amount recommended by NSAC, the elimination of the expense reporting requirement across the board effectively applies the most valuable provision from the Micro Farm program to all WFRP enrollees. NASC awaits the opportunity to assess how an improved Micro Farm pilot will distinguish itself and create opportunities for producers with a maximum approved revenue up to $350,000 in the year ahead.
These reforms to WFRP are especially timely given the upcoming rollout of Phase 2 of FSA’s Emergency Relief Program (ERP), which is designed to distribute relief funds to farmers and ranchers impacted by natural disasters in 2020 and 2021. The second phase of ERP will be specifically aimed at aiding producers left out of existing programs, on the condition that they purchase insurance or coverage under the Noninsured Crop Disaster Assistance Program (NAP) for the next two available crop years. With a streamlined paperwork burden, WFRP will be an ideal option for the small, diverse, organic, and otherwise underserved producers who receive aid from ERP.
Watch this video message from RMA Administrator Marcia Bunger sharing news of these significant improvements to WFRP.
WFRP Education This Fall
This fall, RMA is launching a Whole-Farm Revenue Protection and Micro Farm Road Show with in-person and virtual events across the country. RMA experts will provide an in-depth look at these policies and answer questions from farmers and agents. With the recent changes to significantly reduce the historic paperwork burden and streamline access, and with worsening weather-related disasters across the country, now is an ideal time for farmers to consider enrolling in WFRP.
The first two virtual events to kickoff RMA’s Road Show will be held on Tuesday, October 11, at 11:30am Eastern and Thursday, October 13, at 4pm Eastern. Check back here for an updated list of in-person and virtual events as the season progresses.
NSAC is grateful for RMA’s decision to double down on education for WFRP at this critical moment and strongly encourages members and farmers in our network to tune into or join WFRP outreach events hosted by RMA.
What’s on the Horizon?
NSAC looks forward to continued collaboration with RMA to improve Whole-Farm Revenue Protection, always ground-truthing our recommendations with farmers and ranchers and insurance agents with WFRP experience. Indeed, even with these positive changes, hurdles remain in order for WFRP to shed its negative reputation in farm country.
Above all, in the coming year NSAC hopes to see RMA prohibit the adjustment of price and production expectations at the time of a loss claim. This is an alarmingly common practice which most often results in the last-minute reduction of the farmer’s indemnity payment and, in our experience, is the primary reason why farmers drop WFRP coverage.
In addition, NSAC supports provisions that would strengthen the diversification discount built into WFRP. This is a unique feature among insurance products that draws many producers to the program. Farmers routinely express that they experience little or no discount beyond three commodities or that they are too diverse for the incentive to matter. And, finally, NSAC advocates for RMA to update its definition of Good Farming Practices to not disincentivize the adoption of conservation practices across insurance products.
This year’s changes, especially when supplemented by the changes and active outreach to producers and agents from RMA that we see on the horizon, may just have the potential to cement WFRP as a modern and streamlined crop insurance option for all producers.
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