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Monday, December 1, 2014

New farm risk management tool!


Basics of the new Whole Farm Revenue Protection (WFRP) policy

 
Diverse family farms now have an additional risk management tool available.



WFRP is a new crop insurance policy called for in the 2014 Farm Bill and developed by the USDA, Risk Management Agency. This newly available crop insurance product is not intended for a single specific crop, but for all the crops, livestock, and products that are grown, raised, or produced on your farms.This product may be of special interest to diversified and organic farms that do not have single crop policies or organic price elections available.
 
This new crop insurance product is available as one response to the needs of many farm families that previously had fewer choices of risk management tools because of their highly diverse enterprises.
 
Producers should start talking with their crop insurance agent if they are interested in the policy to be prepared for the March 16th sales closing date for WFRP.
 
WFRP is available in all states and counties of the eastern U.S.Some of the most notable benefits this new insurance option offers include:
  • An $8.5 million liability limit (an increase from $6.5 million under AGR and $1 million under AGR-Lite);
  • 85% of historical revenue coverage level when at least three crops are grown (an increase over the previous 80% cap);
  • a premium subsidy of up to 80% when at least two crops are grown (a significant increase over the highest subsidy rate of 59% provided under AGR-Lite);
  • a premium discount for increased diversification stair stepped up to 7 crops;
  • coverage for both crops and livestock (capped at 35% of expected revenue up to $1 million);
  • inclusion of some incidental processing expenses necessary to make the commodity ready for market, such as washing, trimming, and packaging;
  • replant coverage for a crop losses early enough for replanting; and
  • the continued option to insure individual crops under separate crop policies (cannot be CAT level coverage).
The paperwork responsibilities for the farmer will include:
  • The WFRP Application
  • Whole Farm History Report (last 5 tax years)
  • IRS Tax Form 1040 Schedule F
  • Farm Operation Report (Intended, Revised, Final)
  • Allowable Expenses Worksheet
  • Allowable Revenue Worksheet
  • Beginning and end of year Inventory Reports (if applicable)
  • Accounts Receivable and Payable Reports for beginning and end of year (if applicable)
  • Market Animal and Nursery Inventory/Accounting Worksheet (if applicable)
  • Verifiable complete marketing record for each commodity

The USDA, RMA fact sheet on this new risk management tool is available at: http://www.rma.usda.gov/policies/2015/wfrpfactsheet.pdf

RMA provides this web site so we can search for certified crop insurance sales agents:
http://www.rma.usda.gov/tools/agent.html

1 comment:

Md. Mezbanur Rahman said...

Risk management is an often overlooked strategy that can make a difference in the success of your farm. We need to provide farmers and agribusinesses with information to improve farm financial management and reduce risk. That can be possible only if we do proper research in agricultural development.