Whole-Farm Revenue Protection (WFRP) Plan
Aug 31, 2017
Whole-Farm Revenue Protection (WFRP) insurance provides coverage against the loss of revenue that you expect to earn, or will obtain from commodities you produce or purchase for resale during the insurance period under one insurance policy. WFRP combines the Adjusted Gross Revenue (AGR) and Adjusted Gross Revenue-Lite (AGR-Lite) pilot programs and provides additional enhancements such as:
- A range of coverage levels from 50-85 percent to fit the needs of more farming and ranching operations;
- Replant coverage for annual crops;
- The ability to consider market readiness costs as part of the insured revenue and expenses;
- Provisions to adjust the insurance guarantee to better fit expanding operations;
- An improved timeline for farming operations that operate as fiscal year filers; and
- Streamlined underwriting procedures based on the forms used for WFRP.
Q Where is WFRP Available?AWFRP is available for purchase from your local crop insurance agent. You can find a crop insurance agent at the following link on the Risk Management Agency (RMA) website at the Agent Locator Page.
These agents work for AIPs that have reinsurance agreements with the RMA.
Q What type of subsidy is available for WFRP?AWhole-farm subsidy is available for WFRP if you qualify through diversification on your farm. The availability of whole-farm subsidy for WRFP for farms meeting the diversification requirements for two commodities means that WFRP insurance provides the same higher whole-farm subsidy levels available on the Revenue Protection products.
Your WFRP subsidy amount will be based on the commodity count calculation indicating the amount of farm level diversification of revenue that you have. If you have two (2) or more commodities that significantly contribute to your operation, you will receive a whole-farm subsidy. If not, you will receive the basic subsidy. The following subsidy amounts will apply for WFRP.
WFRP Subsidy: Percentage of Total Premium Paid by Government
Coverage Level 50% 55% 60% 65% 70% 75% 80% 85% Basic Subsidy-Qualifying Commodity Count: 1 67% 64% 64% 59% 59% 55% N/A N/A Whole-Farm Subsidy-Qualifying Commodity Count: 2 80% 80% 80% 80% 80% 80% N/A N/A Whole-Farm Subsidy-Qualifying Commodity Count: 3 or more 80% 80% 80% 80% 80% 80% 71% 56%
Q What is the last date to purchase (sales closing date) WFRPAFor calendar year filers and fiscal year filers with a fiscal year beginning August 1 or earlier, sales closing dates are the same as other spring crop sales closing dates applicable for your county and will be January 31, February 28 or March 15. For fiscal year filers with a fiscal year beginning September 1 or later the sales closing date is November 20.
Farm tax records are used to determine the amount of insurance under WFRP. Some producers file their taxes on a Calendar basis and some file their taxes on a Fiscal Year basis. WFRP needs to be purchased at the same time regardless of how taxes are filed, as shown in the following examples:
Example: A Calendar Year tax filer’s tax year for 2017 begins January 1, 2017. WFRP must be purchased on or before the county SCD in 2017 (i.e., January 31, February 28 or March 15, 2017).
Example: Fiscal Year tax filers, must purchase their WFRP policy by the SCD in the year that corresponds to the year in which the tax year begins. In this example the Fiscal tax year is July 1, 2017 to June 30, 2018. WFRP must be purchased on or before the county SCD in 2017 (i.e., January 31, February 28 or March 15, 2017).
Consult a crop insurance agent or check the Actuarial Information Browser on the RMA website to find the sales closing date for your county. The Actuarial Information Browser can be found on RMA’s website at Actuarial Information Browser.
Q How are commodities counted on my farm?AThe WFRP commodity count is a calculation rather than simply a count of commodities produced. It is important to understand that the commodity count used by WFRP is not just what you are growing or producing on the farm, but is a measure of farm diversification that shows the farm has reduced its risk by producing significant amounts of multiple commodities. For example: A farm may have 95 percent of its revenue coming from apples and 5 percent from pears. For WFRP purposes, this farm would be considered to have only one commodity. However, if the farm had 80 percent of its revenue coming from apples and 20 percent from pears, the farm would be considered to have two commodities. The commodity count calculation must be used to determine the number of commodities that count under the policy.
The calculation determines the minimum proportion of revenue a commodity must contribute to the farm to be considered a countable commodity for WFRP. A farm’s revenue would be evenly distributed if an equal percentage of revenue came from each commodity produced, for example, 25 percent from Corn, 25 percent from Soybeans, 25 percent from Spinach and 25 percent from Carrots. The minimum proportion to be considered a countable commodity is one-third of that evenly distributed amount. Therefore, in this example, for corn, soybeans, spinach, or carrots, each commodity would have to make up at least 8.3 percent of the total revenue of the farm to count as a commodity under WFRP. Commodities with revenue below the minimum will be grouped together in order to recognize the diversification of the multiple commodities (this will make the commodity count higher). Section 19 of the WFRP policy shows how the commodity count is determined.
Q Are there limits to what farms can be insured under WFRP?AYes, if any of the following limits are exceeded, the farm will not qualify for WFRP:
- The farm’s total coverage must be $8.5 million or less at the sales closing date (this is approved revenue multiplied by the selected coverage level);
- The expected revenue from animals and animal products on the farm may be $1 million or less at sales closing date;
- The expected revenue from nursery and greenhouse products on the farm may be $1 million or less at sales closing date;
- The farm must have a commodity count of two (2) or more commodities if the farm has potatoes; or
- Farms that have a commodity that is insurable under Revenue Protection, Revenue Protection with the Harvest Price Exclusion, or the Actual Revenue History plan of insurance must meet the diversification requirements of at least two commodities on the farm in order to qualify for WFRP insurance.
Q Does diversification on my farm matter?AYes! Farm level diversification is important in WFRP. In general, diversification is measured by the number of commodities on the farm. Farm diversification reduces revenue risk on the farm. The following are key items in WFRP that are affected by diversification on the farm (Note: The number of commodities is determined by the amount of farm diversification measured by a commodity count calculation in the policy, as described in the answer to the previous question.):
- Qualification for the 80 and 85 percent coverage levels requires a minimum of three (3) commodities;
- A minimum of two (2) commodities is required for potato farms to qualify for WFRP insurance;
- Farms that have a commodity that is insurable under Revenue Protection, Revenue Protection with the Harvest Price Exclusion, or the Actual Revenue History plan of insurance must have a minimum of 2 commodities on the farm in order to qualify for WFRP insurance;
- Farms with two (2) or more commodities will receive a premium rate discount based on the amount of diversification (This discount is a reflection of the lower risk of revenue loss because of the farms diversification); and
- Farms with two (2) or more commodities will also receive a whole-farm subsidy resulting in less premium cost to the producer.