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C r o p I n s u r a n c e
today
By Dean Strasser, NCIS
The Whole-Farm Revenue Protection Pilot
program (WFRP) was first released in November
2014 for the 2015 crop year and has seen many
changes since that time. As a pilot program,
changes and improvements can be made in quick
fashion when compared to other Federal crop
insurance policies codified in the Federal regulations.
Having a program in pilot status is both
beneficial and challenging. Beneficial from the
standpoint that needed improvements can be implemented
and put into effect almost immediately.
Challenging in that keeping up with changes
requires diligence on the part of Approved Insurance
Provider (AIP) training staff and agents to
fully understand the impact of the changes and
what that means to farmers.
The most recent change to WFRP is the addition
of a new policy for smaller scale farms, or
micro farms. The first time we discussed WFRP
on the pages of Crop Insurance TODAY® was the
February 2015 edition. The article was contributed
by the USDA's Risk Management Agency
(RMA). In that article WFRP was explained as
follows: " The WFRP policy was specifically developed
for farms that tend to sell to direct, local
or regional, and farm-identity preserved markets
and grow specialty or organic crops and animals
and animal products. " In USDA's November 30,
2021, news release announcing the availability
of the Micro Farm policy, Marcia Bunger, Administrator
for USDA's RMA stated: " USDA is
focused on supporting local and regional food
systems, and Micro Farm is one more example
of how we're helping agriculture producers with
farms of all shapes and sizes to manage their
unique operations and risk. " The objectives in the
two statements do not sound all that different, so
what does the new Micro Farm policy provide
that wasn't previously available?
VisitWebsite
ag-risk.org
Whole-Farm Revenue Protection
for Smaller Scale Farms
To start the conversation, it's best to begin
with identifying a major challenge with offering
any Federal crop insurance program. In a nutshell
the challenge can be summed up thusly:
To provide meaningful coverage without overburdensome
record requirements yet obtain
adequate information necessary to underwrite
insurance policies and protect the integrity of
the program. Does the existing WFRP program
meet this challenge for highly diversified smallscale
farms? A quick read of the study on the
feasibility of insuring local food production
contracted by RMA1, which is available on the
RMA website, would say that the current WFRP
program primarily misses on two accounts.
First, the record requirements of the current
program are overly burdensome for highly diversified
small-scale operations. Second, the
existing program does not provide meaningful
coverage because it tends to focus on wholesale
pricing that is often much less than prices received
in direct-to-consumer markets.
Addressing the first concern, the current program
requires that farmers have yield and price
information for each commodity they produce.
If you are familiar with WFRP, you know that
WFRP provides protection against loss of revenue
that a farmer expects to earn or will obtain
from all insurable commodities produced on the
farm operation or purchased for resale during the
insurance period. One does not pick and choose
which commodities to insure or not insure. The
Micro Farm policy does not change this tenet of
WFRP. Tracking revenue earned from individual
commodities is difficult at best and nearly impossible
for farmers growing multiple commodities
on small acreages with multiple growing seasons.
Add in that multiple commodities may be grown
on the same acreage or space during the insurance
year further complicates recordkeeping by
commodity. Referencing the contracted study,
the following sums up the concerns expressed
about excessive recordkeeping requirements of
the current WFRP program.
" Producers were very vocal about the unique
reports they need to submit to be eligible for insurance
and the requirement to report revenue by
commodity. Providing sales records by commodity
is cumbersome and viewed as excessive and
unnecessary by local food producers. "
So how does the new Micro Farm policy address
this concern?
CROPINSURANCE TODAY®
11
http://ag-risk.org
55-1

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