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  • BFR/VFR BENEFITS

  • Q What are the benefits of being a BFR or VFR?

    A

    The BFR and VFR benefits are the same:

    • Exemption from paying the administrative fee for catastrophic (CAT) and additional coverage (buy up) level policies;
    • Additional 10 percentage points of premium subsidy for additional coverage policies (buy-up) that have premium subsidy;
    • Use of the previous producer’s production history for the specific acreage transferred to you if you were previously involved in the decision making or physical activities on any farm that produced the crop or livestock; and
    • An increase in the substituted yield for yield adjustment, which allows a replacement of a low yield due to an insured cause of loss, from 60 to 80 percent of the applicable transitional yield (T-Yield) for the crop in the county.
  • BFR/VFR QUALIFICATIONS

  • Q What is a BFR and how do you qualify?

    A

    A BFR is an individual who has not actively operated and managed a farm or ranch with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 5 crop years (10 crop years for WFRP). The 5 crop years (10 crop years for WFRP):

    • Includes an insurable interest as an individual or as a substantial beneficial interest holder (10 percent or more) in another person who has an insurable interest in any crop or livestock; and
    • Excludes crop years when the BFR was under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years) or on active duty in the U.S. military.
  • Q What is a VFR and how do you qualify?

    A

    A VFR is an individual who has served on active duty in the United States Army, Navy, Marine Corps, Air Force, and Coast Guard, including the reserve components, was discharged or released under conditions other than dishonorable, and qualifies under any of the following:

    • Has not operated a farm or ranch;
    • Has operated a farm or ranch for not more than 5 years; or
    • Is a veteran who has first obtained status as a veteran during the most recent 5-year period, even if that veteran has previously operated a farm or ranch for more than 5 years.

    A spouse’s veteran status does not impact whether an individual is considered a VFR.  Additionally, a person, other than an individual, may be eligible for veteran farmer or rancher benefits only if all substantial beneficial interest holders qualify as a VFR.

  • Q Can entities other than an individual qualify to be a BFR?

    A

    Business entities may receive BFR benefits only if all of the substantial beneficial interest holders of the business entity qualify as a BFR.

    For example, a son moves home to take over the family farm and incorporates with his spouse and neither have previous farming experience. Their corporation would qualify for BFR benefits.

    However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive BFR benefits. Although the son qualifies as a BFR, the father does not, so their corporation would not qualify for BFR benefits.

  • Q Can entities other than an individual qualify to be a VFR?

    A

    Business entities may receive VFR benefits only if all of the substantial beneficial interest holders of the business entity qualify as VFR.

    For example, a veteran moves home to take over the family farm and incorporates with his/her spouse and neither have previous farming experience. Their corporation would qualify for VFR benefits.

    However, if a veteran moves home and forms a corporation with a parent, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive VFR benefits. Although the veteran qualifies as a VFR, the parent does not so their corporation would not qualify for VFR benefits.

  • BFR QUALIFICATIONS DETERMINING A CROP YEAR AND YEAR FOR EXCLUSION

  • Q What is considered a crop year?

    A

    To determine what is a crop year in which you have an insurable interest in crop or livestock in a crop year:

    1. The crop year is when the individual had a financial interest in a crop or livestock and is based on the actual crop or livestock produced, for:

    a. For insurable crops and livestock, the crop year is from the sales closing date to the end of insurance date;
    b. For uninsurable crops the crop year is from the planting date to the harvest date; and
    c. For uninsurable livestock the crop year is from July 1 to June 30.

  • Q How do I determine which crop years can be excludable for BFR qualifications?

    A

    To determine whether the crop year can be excluded the exclusion must:

    1. Meet procedural criteria, such as military, education, and 18 years old or younger exclusions.
    2. Meet the criteria in number 1 above and the exclusionary time overlaps the established crop year, the crop year may be excluded.

  • Q If an individual has actively operated or managed the planting and harvesting of an uninsurable crop or owned and raised uninsurable livestock in a county, is that considered an insurable interest in a crop or livestock? For example, an individual has 100 percent share in the planting and harvesting of carrots in Iowa where carrots are not insurable and owned and raised uninsurable chickens.

    A
    In determining BFR status, an insurable interest does not mean that the crop or livestock must be insurable, just that the individual must have an interest that is at financial risk in the crop or livestock. In the example provided, the individual has a financial risk that is considered an insurable interest for the purpose of determining BFR benefits.
  • Q For perennials, what constitutes a crop year - when it is planted, when any of the crop is produced, or when the crop reaches production minimums or insurable age?

    A
    A crop year, for BFR benefits purposes, for perennials is when the tree, vine, or bush produces a crop that is of such a value to be commonly harvested and marketed for the area. For insurable crops, it is when the crop has reached production minimums or insurable age and for uninsurable crops, as determined by local agricultural experts.
  • Q Is an interest in Conservation Reserve Program acreage considered an insurable interest in a crop or livestock for determining eligibility for BFR benefits?

    A
    No, an interest in Conservation Reserve Program acreage is not considered an insurable interest in a crop or livestock because there is no crop or livestock for the acreage.
  • Q Are there a minimum number of months in a calendar year in which interest in a crop or livestock must have been in place to consider it a year of having interest?

    A

    No, a crop or livestock crop year is counted if the person had a financial risk during the crop year.

  • Q Does there need to be a relationship between being in college and when the interest in the crop or livestock took place, does it need to occur in the same months?

    A
    Yes. Any allowable exclusions must overlap the crop year when you had an insurable interest in a crop or livestock.
  • Q When does the crop year start for exclusion purposes? If I attended college January through May 2020 and planted soybeans in June 2020 and the sales closing date for the policy is March 15, would just 2 months of college (April and May) be considered when determining whether the crop year can be excluded?

    A
    The crop year begins with the sales closing date and ends with the end of insurance date. You attended a semester for 4 months, which overlapped the crop year, meeting the procedural criteria for exclusion. Since you met one of the exclusion criteria during the crop year, the crop year may be excluded.
  • Q If I was enrolled in college from September 2019 to June 2020 and produced corn in crop years 2019 and 2020, is this considered 1 or 2 years of college for exclusions of a crop year?

    A
    In this example, the corn crop year begins on March 15 (the sales closing date) and ends December 15 (the end of insurance). The 4-month college exemption is met and the college time overlapped both the 2019 and 2020 crop years for corn. Therefore, both crop years may be excluded.
  • Q If I had an interest in livestock from December 2018 through January 2019, is this considered 1 or 2 crop years? What if the insurable interest was March 2019 through August 2019?

    A
    The livestock crop year is July 1, 2018, to June 30, 2019, and July 1, 2019, to June 30, 2020. An interest between December 2018 and January 2019 is 1 crop year. An interest between March 2019 and August 2019 is 2 crop years.
  • Q If I was in college from September 2019 through June 2020 and during that time had a herd of beef cattle, would this be considered 2 crop years for a crop like corn but 1 crop year for livestock?

    A

    Yes. You met the 4-month college exclusion and the crop years are excluded. See the table below.

    Commodity/Crop Year
    Crop Year College Exclusion Overlap
    Corn CY 2019
    March 2019 to December 2019 September 2019 to June 2020 Yes
    Corn CY 2020
    March 2020 to December 2020 September 2019 to June 2020 Yes
    Livestock CY 2020
    June 2019 to June 2020 September 2019 to June 2020 Yes
  • BFR/VFR APPLICATION

  • Q How do I apply for BFR or VFR benefits?

    A
    Contact your crop insurance agent. You will need to complete a BFR/VFR Application and:
    • For BFR, provide acceptable documentation for any crop years you wish to exclude from consideration of BFR status for when you were under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years), or on active duty in the U.S. military.
    • For VFR, provide acceptable documentation for military records to substantiate active military service and discharge.
    You will be notified if you qualify.
  • Q Can a VFR exclude crop year(s) like a BFR can?

    A
    No, this is only applicable to BFR qualifications.
  • Q If I change my crop insurance agent or Approved Insurance Provider can I keep my BFR or VFR benefits? Do I have to complete a new BFR/VFR Application?

    A

    Yes, you can keep your BFR or VFR benefits as long as you remain eligible. Changing an insurance agent or Approved Insurance Provider does not impact your BFR or VFR eligibility.

    When you change insurance agents or Approved Insurance Providers you do not need to complete a new BFR/VFR Application but you must provide your new insurance agent or insurance provider a copy of your previously completed BFR/VFR Application and notice of approval.

  • BFR/VFR USE OF PREVIOUS PRODUCER’S PRODUCTION HISTORY

  • Q Is a BFR or VFR required to have a signed statement from the other person granting permission for the BFR or VFR to use their production history when using another person’s history?

    A
    Consent from the other person whose production history is being used is required. The BFR or VFR is also required to have supporting records, upon request.
  • Q Are the years of production history transferred from the previous producer to a BFR or VFR considered when determining the number of years of an insurable interest in a crop or livestock for BFR or VFR eligibility purposes?

    A
    The years of history transferred do not count as crop years of insurable interest unless the BFR or VFR had an insurable interest in the crop, such as a substantial beneficial interest. However, if that was the case, it would likely fall under Crop Insurance Handbook, Paragraph 1509 or 1510, and the BFR or VFR would not transfer another person’s history as provided in Paragraph 1508.
  • Q Are the number of years of production history transferred from the previous producer to a BFR or VFR limited to the number of years that the BFR or VFR was previously involved in the farming or ranching operation?

    A
    Unlike the Transfer of actual production history data in the Crop Insurance Handbook, Paragraph 1507, the number of years of production history that may be transferred is not limited by the number of years the BFR or VFR was previously involved in any farming or ranching operation. However, a BFR or VFR can only use another person’s production history for a crop that the BFR or VFR was previously involved in. If the BFR or VFR was involved with the livestock, they can use the other person’s livestock records. If the BFR or VFR was involved with a crop, they can use the previous producer’s crop production records for new acreage, provided all of the requirements in Paragraph 1508 are met. Only the production history of the specific acreage being transferred may be transferred to the BFR or VFR.
  • Q A BFR that has been involved in the decision making of his father’s corn and soybean operation wants to rent 100 acres from their neighbor and plant corn. The neighbor has a history of planting corn and provides consent to the BFR to use the history. Whose production history can be used for the 100 acres of corn to be planted?

    A
    Since the BFR was involved in the decision making on his father’s operation that grew corn, the BFR may use the neighbor’s corn production history on the 100 acres.
  • Q A VFR that was previously involved with the physical activities for his father’s wheat operation. The VFR purchases 100 acres from his neighbor and wants to plant sunflowers. Will the VFR be able to use the neighbor’s sunflower production history?

    A
    No, the VFR had no previous involvement in the decision making or physical activities in growing sunflowers, therefore they will not be able to use the neighbor’s production history for sunflowers.
  • Q A BFR that has been involved in the physical activities growing corn on his family’s farm wants to rent 100 acres from his neighbor and grow corn. The previous renter of the land that grew corn will not consent to the BFR using their production history. Whose production history can be used for the 100 acres of corn to be planted?

    A
    Since the previous producer did not provide consent to the BFR, there is no other history applicable to transfer to the BFR. The BFR would establish their corn APH database on the 100 acres with T-Yields.
  • Q Why did my yield substitution go to 60 percent of the transitional yield (T-Yield) when it was 80 percent of the T-Yield before?

    A
    When you no longer qualify for BFR or VFR benefits, you will receive the same yield substitution as all other producers who are not BFRs or VFRs. You will also no longer be exempted from paying the administrative fees for your policies and you will no longer receive an additional 10 percentage points of premium subsidy.
  • BFR/VFR DURATION OF BENEFITS

  • Q How long can I be a BFR and have BFR benefits?

    A

    Once you have 5 crop years (10 crop years for WFRP) of insurable interest in a crop or livestock, including having a substantial beneficial interest (10 percent or more) in another person who has an insurable interest in a crop or livestock, you are no longer entitled to BFR status. Once you elect and qualify for BFR status, it is continuous until the earlier of:

    • You have had an insurable interest in a crop or livestock for more than 5 crop years (10 crop years for WFRP);
    • 5 crop years of BFR benefits are exhausted; or
    • You cancel your BFR Application.
  • Q How long can I be a VFR and have VFR benefits?

    A

    VFR status is dependent on how you qualified for VFR status. Once you elect and qualify for VFR status, it is continuous unless you cancel your application or either of the following conditions exist:

    • If you qualified for VFR status based on having operated a farm or ranch for not more than 5 years, then once you have operated a farm or ranch for 5 years, you are no longer entitled to VFR status.
    • If you qualified for VFR status based on first obtaining status as a veteran during the most recent 5-year period, then once 5 years has elapsed from first obtaining status as a veteran, you are no longer entitled to VFR status.
  • Q I am in night college classes yet want BFR premium subsidies now, do I have to wait until I complete my degree to deduct those years from experience?

    A
    No, you can receive BFR benefits while attending college or university. However, these years will count towards the maximum 5 crop years (10 crop years for WFRP) that a producer can qualify for BFR benefits.
  • Q What if I change my farming operation? For example, if I form a corporation or other business entity, can I retain my BFR status?

    A
    A business entity may receive BFR benefits if all of the substantial beneficial interest holders of the business entity qualify as a BFR. If you qualify as a BFR and you form a corporation, your corporation maybe eligible for BFR benefits. For example, a husband and wife form a corporation and neither spouse had previous farming experience or an insurable interest in a crop or livestock. The corporation would be eligible for BFR benefits. However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years (10 crop years WFRP), the corporation cannot receive BFR benefits. Although the son may qualify as a BFR, the father does not and as such the corporation cannot receive BFR benefits.
  • Q On January 10, 2018, I was honorably discharged from the military and now I want to start farming. How many years of VFR benefits do I qualify for?

    A

    Years of benefits are based on the VFR status you qualify for:

    VFR status is based on not operating a farm for not more than 5 years.

    • Since you have never farmed, you would qualify for 5 years of VFR Benefits.

    VFR status is based on first obtaining veteran status during the most recent 5-year period.

    • Since you have first obtained veteran status within the most recent 5-year period, you would qualify for VFR benefits through January 9, 2023.

    Note: When completing the VFR Application, you must choose one of the two VFR qualifiers.

  • Q I was honorably discharged from the military January 15, 2020. However, I have previously operated a farm for 7 years, do I qualify for VFR benefits?

    A

    You can qualify based on either:

    VFR status is based on not operating a farm for not more than 5 years.

    • Since you have operated a farm for more than 5 years you would not qualify under this condition.

    VFR status is based on first obtaining veteran status during the most recent 5-year period.

    • Since you have first obtained veteran status within the most recent 5-year period, you would qualify for VFR benefits through January 14, 2025.
  • Q I was honorably discharged January 1, 2015, from the military and have never operated a farm. I will start farming March 1, 2021. Can I receive VFR benefits?

    A

    You can receive benefits based on either:

    VFR status is based on not operating a farm for not more than 5 years.

    • Since you have never farmed, you would qualify for 5 years of VFR Benefits.

    VFR status is based on first obtaining veteran status during the most recent 5-year period.

    • Since you have first obtained veteran status outside of the most recent 5-year period, you would not qualify under this condition.
  • Q On January 15, 2017, I was honorably discharged from the military. Previously I had a small farming operation in 2016 and 2017. Do I qualify for VFR benefits?

    A

    You can receive benefits based on either:

    VFR status is based on not operating a farm for not more than 5 years.

    • Since you have operated a farm or ranch for 2 years, you would qualify for 3 years of VFR Benefits under this condition.

    VFR status is based on first obtaining veteran status during the most recent 5-year period.

    • Since you have first obtained veteran status within the most recent 5-year period, you would qualify for VFR benefits through January 14, 2022.

    Note: When completing the VFR Application, you must choose 1 of the 2 VFR qualifiers.

  • Q I had operated a farm from 2010 to 2016 then entered the Army on active duty. I was honorably discharged from the Army on July 19, 2020, and subsequently joined the Army National Guard. Do I qualify for VFR benefits?

    A

    You can receive benefits based on either:

    VFR is status based on not operating a farm for not more than 5 years:

    • Since you have operated a farm for more than 5 years you would not qualify under this condition.

    VFR status is based on first obtaining veteran status during the most recent 5-year period.

    • Since you have first obtained veteran status within the most recent 5-year period, you would qualify for VFR benefits through July 18, 2025.

    Additionally, this would be the only period of VFR benefits based on date of discharge. Once you are discharged from the Army National Guard you will not receive another 5 years of benefits as they are based on when you first obtained veteran status.

  • OTHER

  • Q Why is the definition of BFR and VFR for crop insurance different from other USDA agencies?

    A
    Section 11016 of the 2014 Farm Bill for BFR and Section 12036 of the 2108 Farm Bill for VFR provided definitions, along with specific benefits, for BFR and VFR unique to the Federal crop insurance program. Therefore, other USDA agencies may have different qualifying criteria and benefits for their BFR and VFR.