USDA updates two agricultural insurance policies

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USDA Risk Management Agency (RMA) has changed key elements of its main insurance policies, based on feedback from customers and insurance agents.

Most important are the increased farm income limits that are covered by the new policies. For the Whole farm income protection (WFRP), covered earnings have now doubled, so up to $17 million is insurable. The policy is generally intended for larger farms, with the policy aimed at ensuring that all products on the farm are covered by a single insurance policy.

For small operations, the Micro-farm program will now cover up to $350,000 of income, up from $100,000 previously. The policies are geared toward farmers who might participate in local farmers’ markets, focus on specialty crops, or have urban farms with less space. “While $100,000 seems like a lot, when you start adding up income, it can quickly exceed that cap,” says RMA administrator Marcia Bunger. “Really, if a farm operation makes less than $100,000, it’s very small, usually a hobby operation. So with feedback from agents and producers, we worked to increase that to $350,000, and it seemed to catch a lot more trades. Bunger says the RMA has also worked to streamline the paperwork process for both policies, so growers can start claims quickly when needed.

We know farmers want improvements to their insurance policies. When we asked which agencies were looking for in the 2023 Farm Billl, access to crop insurance and increased incentives were high on almost everyone’s list. Many agencies have called for incentives such as insurance discounts or deferred payment plans for growers who use regenerative methods or practices like cover cropping, which the USDA has already offered.

During the pandemic, Bunger says, the RMA issued a $5 per acre bounty credit to growers who planted cover crops. But whether that bounty, or any other, continues or not is up to Congress to decide. “We’re waiting for Congress to give us the direction, with the path they’d like to see taken,” Bunger said. While the main components of the insurance programs are dictated by the Farm Bill, the RMA has flexibility in its management. “We’re creatively finding ways to deliver an agenda that follows Congressional mandates, while also making sure it’s strong enough, because there’s also an element that taxpayers are paying for that, and we have to ensure to put safeguards in place so that there is no fraud, waste and abuse, and at the same time, it is based on solid data.

This data is essential for the RMA and they hope to collect more. The agency has a series of roadshows scheduled for October and November, held virtually, who will review all the details of the insurance programs and invite comments and questions. “As we spread the word, I hope people who have not been able to access crop insurance for whatever reason, that we can improve this process for them.”

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