Safety Net

Deadline Near for Revenue Protection Insurance

Victoria G Myers
By  Victoria G. Myers , Progressive Farmer Senior Editor
Insurance should be a good fit for livestock operations looking for risk management tools. (Progressive Farmer/DTN photo by Joe Link)

The final deadline to apply for Whole Farm Revenue Protection insurance (WFRP) is coming up this month on March 15. Changes in the program should make it more appealing to livestock producers, says Jay Parsons, University of Nebraska agricultural economist.

Parsons reports the program allows producers to insure up to $1 million in revenue from animals and animal products. In addition, a provision that maintained an operation had to receive at least 35% of its income from livestock production to qualify no longer exists.

WFRP is available in every county in America. It covers an operation for lost revenue on all commodities produced on the farm—including livestock, commodities produced, commodities bought for resale and specialty crops--with adjustments made for inventory carryovers. Not included are timber or animals for sport, show or pets. In some areas deadlines were established to sign up for the coverage by January 31 or February 28. The USDA website says sales closing dates "are the same as other spring crop sales closing dates applicable for your county" but does not provide a list.

Coverage can be purchased for up to $8.5 million in revenue in levels ranging from 50% up to 85%. These coverage levels can be stepped up in 5% increments. Parsons notes coverage at the 80% or 85% levels requires the production of at least three commodities.

Beginning farmers and ranchers interested in WFRP will need three years of historical tax records, and farming/financial records for the past season. This requirement can be met, adds Parsons, by using the former farm or ranch operator's historical records (as long as the beginning rancher or farmer assumes 90% or more of the operation).

Losses are defined by USDA's Risk Management Agency as "the loss of insured revenue due to an unavoidable natural cause of loss that occurs during the insurance period." A notice of revenue loss must be submitted within 72 hours of discovery, and inspections may be required. Any claims made on WFRP are settled after taxes are filed. Claims must be made no later than 60 days after submitting farm tax forms to the IRS. A loss occurs when WFRP revenue-to-count falls below the insured revenue. Revenue-to-count is revenue from the tax form that is a part of approved revenue coverage adjusted for year to year inventory carryover.

Interested producers can get details from their local crop insurance agent and at this website: www.rma.usda.gov

(VM/SK)

Victoria Myers