James Robinson of RAFI said many farmers targeted by the program have not had insurance or only had insurance for major cash crops like corn and soybeans. Multi-peril policies are only available for certain crops and the non-insured crop disaster assistance program provided a 65 percent coverage level using the Farm Service Agency average for yield and price. Neither program were the right tool to cover diversified farms raising high-value crops sold in specialty markets.
“It is expanding the safety net so everyone that labors in agriculture has that safety net available,” he said.
Farmers will be insured up to 85 percent of their revenue and receive a subsidy to cover 80 percent of the crop insurance premium. The program covers all revenue on the farm no matter the crop or price point. It uses revenue records available in tax forms and the insurance subsidy may be higher than other programs.
Up to $1 million in livestock and $1 million in nursery products can be covered. The program does not cover timber, forest and forest products, and animals used for sport, show or pets. Loss is not covered if due to quarantine, boycott or deterioration of a commodity in storage.
“If there was human intervention in the loss of the crop, it’s probably not going to be covered,” Robinson said, explaining insurance often uses the phrase “an act of God” to describe what losses can be covered.
Farmers must sign up for a policy by March 15 of the coming crop year. Revised farm operation reports need to be filed by July 15, if any farm plans change between then and the initial filing. A final report and any claim for revenue loss is due March 15 the following year. During the insurance year, farmers must submit a notice of loss within 72 hours after the discovery of an event that will create a revenue loss, such as a natural disaster. Claims are paid after taxes on the revenue are filed.
After a pilot program in 2015, the USDA made several changes to the program to make it more workable for farmers. Beginning farmers will need fewer records to show crop and revenue histories. Expanding farms may insure up to 35 percent more of their historic revenue. The USDA also removed a cap that only allowed up to 35 percent of farm income from livestock, replacing it with the $1 million cap.
Robinson said WFRP allows farmers to insure crops at the price they expect to receive, making room for organic farmers and direct marketers to insure their crops at a higher price than crops sold through conventional markets. Farmers who contract crops can insure at the contract price, as long as it does not exceed 1.5 times the USDA set price.
Roxann Brixon, a crop insurance agent with the Great American Insurance Group, said for a farm to be eligible, the farmer’s Schedule F must cover 100 percent of the farm operation. Farmers who grow one crop covered by a multi-peril plan are not eligible.
Brixon said farmers will need to provide five years of tax records immediately before the insurance year, along with inventory reports and a report of the intended acres and prices for the farm operation. The insurance agent will help determine the allowable revenue.
Brixon said having complete records will be important for farmers seeking whole farm protection. For example, replants are covered similarly to a multi-peril policy, but farmers will need to be able to provide their actual cost of the replant.
Brixon said the benefits of WFRP include insuring revenue from crops normally uninsurable; encouraging diversity on farms; no higher rate to insure high-risk land; farmers can use higher prices than those assigned by the USDA; and the possibility of higher subsidies than other crop insurance programs. Drawbacks for farmers include waiting for loss payments until tax time the following spring and limits on livestock sales. Chemical drift is also not a covered event.
Source - thecountrytoday.com
