by Sally Colby

Farmers who grow a diverse array of crops for a CSA, farmers markets or direct from the farm sales often struggle with finding a suitable insurance plan to protect against the risks associated with farming. An important winter task for such farms should be a thorough review of insurance options for the coming crop year.

Jeremy Forrett, Farm Credit East, discusses Whole Farm Revenue Protection (WFRP), an insurance option for managing revenue volatility. WFRP is a product developed and administered by the USDA’s Risk Management Agency (RMA). “USDA has just over 130 crop insurance products specific to crops you produce,” Forrett said. “The program is delivered by certified crop insurance agents. The crop insurance program specific to Whole Farm has premium support to make premiums affordable.”

Coverage for WFRP ranges from 50% to 85% of insured revenue and provides coverage for all crops under one umbrella policy, which makes it more efficient than having numerous policies. The program considers the entire operation and offers protection.

“The program protects a loss of revenue due to unavoidable natural causes,” said Forrett. “This is production or revenue. It’s specific at the end of the insurance period tied to expected revenue. Coverage must be purchased by March 15, 2021 for the 2021 crop year.”

Forrett outlined the benefits of WFRP: one is the guarantee of expected gross revenue up to 85%. “What’s beneficial about WFRP is if you’re a growing operation and you’ve seen your revenue grow over the last several years, this program most likely will recognize that growth and allow you to protect as close as possible to your 2021 expected gross revenue,” he said.

Whole Farm manages the loss of revenue due to weather or market loss. Another benefit of WFRP is that instead of using commodity prices, the plan considers the price received for crops grown. This aspect is especially important for direct marketers because such farms typically receive higher prices for products.

“Whole Farm allows you to use the price you receive as you set your expected revenue,” said Forrett. “Another benefit is if you’re familiar with the Non-Insurable Crop Disaster Program (NAP) or if you’re producing a crop that typically may not have coverage, look at commodities listed for Whole Farm. Most of the non-traditional crops are covered by Whole Farm.”

Forrett said there’s been a lot of emphasis on working on RMA to make Whole Farm more appealing to direct market operations, recognizing the nature of the business and the fact that recordkeeping requirements for past programs has been a challenge.

“For 2021, through a lot of effort from industry groups as well as agents and insurance providers, the RMA introduced a new commodity code, but it’s a direct marketing code,” said Forrett. “It allows you to combine the expected revenue for all of your crops into one code. If you produce vegetables, honey and other commodities, the prior responsibility and requirement was to keep the sales and production separate. The new commodity code allows you to combine all the crops.”

RMA recognized the nature of diverse businesses, how crops are marketed and how recordkeeping practices on farms were not being addressed by the program. It now allows producers to total the revenue from the combined commodities as well as the acres planted – a significant improvement for the 2021 program.

“The best place to begin is to work with an agent who specializes in Whole Farm,” said Forrett. “It requires information to establish coverage accurately on the front end.” Growers should examine at least five years of past records and determine where growth occurred. If the business is growing rapidly, it’s important to determine how the program will address that growth. The agent will be able to advise the grower how to best determine allowable revenue for coverage.

The next step is to complete a Whole Farm history report, which Forrett said isn’t complicated but should be done with the assistance of an agent after the Whole Farm plan is completed. “Your Whole Farm plan is the crops you produce and the expected revenue for the coming year,” he said. “Once you’ve established farm history and farm plan for the coming year, you can work on a preliminary quote.”

The quote provides the approved gross revenue and coverage level and cost of coverage – what is being guaranteed, and at what cost. This information will help the grower decide whether or not Whole Farm Revenue is a good fit for the business.

Forrett suggested growers interested in WFRP start the process as soon as possible in order to have everything in place prior to the March 15 deadline. The RMA website includes an agent locator to assist growers in finding a suitable agent. “The underwriting side – working with an agent and working with the insurance provider to set up your policy – is an important step,” he said, “and one of the most critical as you begin choosing coverage.”

For more details on WFRP, visit rma.usda.gov/en/policy-and-procedure/insurance-plans/whole-farm-revenue-protection.