DEPARTMENT OF AGRICULTURE FEDERAL CROP INSURANCE CORPORATION WHOLE-FARM REVENUE PROTECTION PILOT POLICY
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21-0076 WFRP- Pilot
Released –Aug. 2020
DEPARTMENT OF AGRICULTURE
FEDERAL CROP INSURANCE CORPORATION
WHOLE-FARM REVENUE PROTECTION PILOT POLICY
Whole-Farm Revenue Protection (WFRP) pilot provides protection against loss of revenue that you
expect to earn or will obtain from commodities you produce or purchase for resale during the insurance
period. Whole-farm revenue consists of revenue from all insured commodities on the farm operation,
including revenue from animals and animal products.
This insurance policy is reinsured by the Federal Crop Insurance Corporation (FCIC) under the provisions
of the Federal Crop Insurance Act (7 U.S.C. 1501-1524) (Act). All provisions of the policy and rights and
responsibilities of the parties are specifically subject to the Act. The provisions of the policy may not be
waived or varied in any way by us, our insurance agent or any other contractor or employee of ours, or
any employee of the United States Department of Agriculture (USDA). We will use the procedures,
including but not limited to handbooks, manuals, memoranda, and bulletins, as issued by FCIC and
published on the Risk Management Agency (RMA) website at www.rma.usda.gov or a successor website,
in the administration of this policy, including the adjustment of any loss or claim submitted under this
policy.
If we cannot pay your indemnity because we are insolvent or are otherwise unable to perform our duties
under our reinsurance agreement with FCIC, your claim will be settled in accordance with the provisions
of this policy, and FCIC will be responsible for any amounts owed. No state guarantee fund will be liable
for your loss.
Throughout this policy, “you” and “your” refer to the insured shown on the application accepted by us, and
“we,” “us,” and “our” refer to the insurance provider providing insurance. Unless the context indicates
otherwise, use of the plural form of a word includes the singular and the singular form of the word
includes the plural. Some of the provisions contained in this policy require information contained on farm
tax form Schedule F for the Federal tax return (Form 1040) or other alternative farm tax forms. Specific
line numbers from the Schedule F for the cash accounting method (2013 tax year version) are referenced
in the policy. To the extent that the line numbers may change, the corresponding line number for the
Schedule F for the policy year the policy is in effect will apply.
AGREEMENT TO INSURE: We agree that in return for the payment of the premium, and subject to all
of the provisions of this policy, we will provide the insurance as stated in this policy. If there is a conflict
between the (1) Act; (2) regulations published at 7 CFR, Chapter IV; (3) policy provisions; and (4)
procedures issued by FCIC, the order of priority is (1) controlling (2), etc. If there is a conflict between
the policy provisions, the order of priority is the (1) Special Provisions, (2) actuarial documents; and (3)
these Basic Provisions, with (1) controlling (2), etc.
Page 1 of 55TABLE OF CONTENTS
Your Insurance Contract ............................................................................................................................ 3
1. Definitions ........................................................................................................................................ 3
2. Application. ..................................................................................................................................... 10
3. Qualifying Person Criteria and Insurance Eligibility. ...................................................................... 13
4. Life of Policy, Termination, and Cancellation. ................................................................................ 14
5. Contract Changes. ......................................................................................................................... 18
6. Notices. .......................................................................................................................................... 18
7. Record Retention and Access to Insured Commodities and Records. .......................................... 19
Your Coverage ........................................................................................................................................... 19
9. Coverage. ....................................................................................................................................... 19
10. Allowable Revenue. ....................................................................................................................... 20
11. Allowable Expenses. ...................................................................................................................... 21
12. Your Approved Revenue and Approved Expenses. ...................................................................... 22
13. Share Insured. ................................................................................................................................ 22
14. Administrative Fees, Subsidy, and Annual Premium. .................................................................... 22
15. Required Reports. .......................................................................................................................... 24
16. Your Whole-Farm History Report and Whole Farm Historic Average Revenue ............................ 26
17. Your Farm Operation Report. ........................................................................................................ 29
18. Expected Value and Expected Yield .............................................................................................. 32
19. Your Commodity Count and Qualifying Revenue Threshold ......................................................... 35
Loss Determinations ................................................................................................................................. 36
21. Causes of Loss. ............................................................................................................................. 36
22. Your Duties in the Event of Damage or Loss. ................................................................................ 37
23. Our Duties in the Event of Damage or Loss. ................................................................................. 38
24. Replant Payment ............................................................................................................................ 39
25. Claim for Indemnity. ....................................................................................................................... 39
Administrative Provisions ........................................................................................................................ 42
28. Assignment of Indemnity. ............................................................................................................... 42
29. Transfer of Coverage and Right to Indemnity. ............................................................................... 43
30. Other Insurance and NAP. ............................................................................................................. 43
31. Amounts Due Us. ........................................................................................................................... 43
32. Commodities as Payment. ............................................................................................................. 44
33. Mediation, Arbitration, Appeal, Reconsideration, and Administrative and Judicial Review. .......... 44
34. Interest Limitations. ........................................................................................................................ 46
35. Descriptive Headings. .................................................................................................................... 46
36. Controlled Substances. .................................................................................................................. 46
37. Applicability of State and Local Statutes. ....................................................................................... 47
38. Concealment, Misrepresentation or Fraud..................................................................................... 47
39. Multiple Benefits. ............................................................................................................................ 47
40. Death, Disappearance, Judicial Incompetence, and Dissolution. .................................................. 47
41. Correction of Errors. ....................................................................................................................... 48
42. Voided Policies ............................................................................................................................... 49
Special Circumstances ............................................................................................................................. 49
44. Organic Commodities..................................................................................................................... 49
45. Post-Production Operations and Added Value. ............................................................................. 50
46. Animals and Animal Products. ....................................................................................................... 50
47. Nursery and Greenhouse Commodities......................................................................................... 51
48. Marketing Contracts ....................................................................................................................... 52
49. Expanded Operations .................................................................................................................... 52
50. Industrial Hemp .............................................................................................................................. 54
51. Direct Marketed Commodities ........................................................................................................ 54
Page 2 of 55Terms and Conditions
Your Insurance Contract
1. Definitions operation, purchased for resale, or
Abandon - Failure to continue activities purchased for further growth and
necessary to produce an amount of allowable development by your farm operation, that the
revenue equal to or greater than the IRS requires you to report on farm tax
expected revenue of a commodity, records.
performing activities so insignificant as to Allowable Revenue Worksheet - A
provide no benefit to a commodity, or failure worksheet to be completed by you and
to harvest or market a commodity in a timely accepted by us that adjusts your revenue by
manner. removing revenue that is not allowable under
Accrual accounting method - A system of this policy.
record keeping in which revenue earned and Animals - Living organisms other than plants
expenses incurred for a specified time period or fungi that are produced or raised in farm
are recorded regardless of whether the operations, including, but not limited to,
revenue was received or the expenses were cattle, horses, swine, sheep, goats, poultry,
paid during the specified time period. aquaculture species, bees, and fur bearing
Act - The Federal Crop Insurance Act (7 animals. For the purposes of this policy,
U.S.C. 1501 et seq.) animals must be propagated or reared in a
Actuarial documents - The information for controlled environment.
the policy year that is available for public Animal products - Any commodity derived
inspection in your agent’s office and from a live animal, excluding commodities
published on RMA's website that includes that are also animals or parts of animals.
available crop insurance policies, coverage Examples include: milk, eggs, honey and
levels, and information needed to determine wool but not live calves, processed broilers,
amounts of insurance, premium rates, package bees, or mutton.
premium adjustment percentages, program Application - The form required to be
dates, and other related information completed by you and accepted by us before
regarding the insurance coverage. insurance coverage will begin.
Administrative fee - A fee in addition to your Approved expenses - The amount of
premium that you must pay for insurance for allowable expenses your farm operation is
each policy year. expected to incur during the insurance
Agricultural experts - Persons who are period, as approved by us.
employed by the Cooperative Extension Approved revenue - The amount of
System, the agricultural departments of allowable revenue that your farm operation is
universities, or other persons approved by expected to earn or will obtain from the sale
FCIC, whose research or occupation is of commodities you produce, or purchase for
related to the specific commodity or practice resale, in the insurance period as approved
for which such expertise is sought. by us.
Allowable expenses – Farm expenses, Assignment of indemnity - A transfer of
specified by this policy and adjusted as policy rights, where you assign your right to
applicable, that are incurred in the production an indemnity payment, for the policy year
of commodities on your farm and reported to only, to creditors or other persons to whom
the IRS on farm tax records. you have a financial debt or other monetary
Allowable Expense Worksheet - A obligation.
worksheet to be completed by you and Average allowable expenses - The average
accepted by us that adjusts your expenses by of the allowable expenses for your whole-
removing any expenses that are not farm history period.
allowable under this policy. Average allowable revenue - The average
Allowable revenue - Farm revenue, of the allowable revenue for your whole-farm
specified by this policy and including history period after any applicable
applicable adjustments, from the production adjustments.
of commodities produced by your farm
Page 3 of 55Beginning accounts payable - Allowable or terminated in accordance with the policy
expenses, supported by verifiable records, terms.
you incurred prior to the insurance period but Carryover insured - An insured that was
that have not been paid at the beginning of covered under WFRP in the policy year
the insurance period. immediately prior to the current policy year
Beginning accounts receivable - Allowable without respect to insurance provider.
revenue, supported by verifiable records, you Cash accounting method - A system of
earned prior to the insurance period, but that record keeping where revenue and expenses
has not been received at the beginning of the are recorded during the time period they are
insurance period. This amount includes the actually received or paid.
value of beginning inventory that is under a Catastrophic Risk Protection (CAT) - The
marketing contract with a buyer to be minimum level of coverage offered by FCIC.
purchased at a specified price. Certified organic acreage - Acreage in the
Beginning farmer or rancher - An individual certified organic farm operation that has been
who has not actively operated and managed certified by a certifying agent as conforming
a farm or ranch in any state, with an insurable to organic standards in accordance with 7
interest in a crop or livestock as an owner- CFR part 205.
operator, landlord, tenant, or sharecropper Certificate - With respect to organic crops, a
for more than ten policy years, as determined written document that identifies the name of
in accordance with FCIC procedures. Any the person certified, effective date of
policy year’s insurable interest may, at your certification, certificate number, types of
election, be excluded if earned while under products certified, and name and address of
the age of 18, while in full-time military the certifying agency.
service of the United States, or while in post- Certification - With respect to organic crops,
secondary education, in accordance with a determination made by the certifying
FCIC procedures. A person other than an agency that the production or handling
individual may be eligible for beginning operation is in compliance with the certifying
farmer or rancher benefits if all of the agency’s certification standards.
substantial beneficial interest holders qualify Certifying agent - A private or governmental
as a beginning farmer or rancher. entity accredited by the USDA Secretary of
Beginning inventory - The commodities you Agriculture for the purpose of certifying a
produced or owned prior to the insurance production, processing, or handling operation
period, but that have not been sold or as organic.
otherwise disposed of at the beginning of the Claim for indemnity - A claim for a loss
insurance period and supported by verifiable made on our form that contains the
records. Any commodity that is under a information necessary to pay the indemnity,
marketing contract with a buyer to be as specified in this policy.
purchased during the previous insurance Combined direct marketing - Two or more
period at a price that will not be determined commodities sold through direct marketing
until the current insurance period or and reported as a single commodity code on
subsequent years will be considered as your Farm Operation Reports.
beginning inventory. Commodities purchased for resale -
Bypassed acreage - Land on which a Commodities not produced by your farm
commodity, grown under a processor operation that are purchased to be added to
contract, is ready for harvest but the buyer your farm operation and then subsequently
elects not to accept the commodity and it is sold. This does not include commodities
not harvested. purchased for further growth, development or
Calendar year filer - An insured that files maturity for later sale, or commodities
taxes based on the 12 consecutive months purchased to replace production of your farm
corresponding to January 1 through operation lost due to insurable causes.
December 31. Commodity - Any agricultural product
Cancellation date - The date specified in the established or produced on your farm
actuarial documents for your tax filer type on operation, except timber, forest, and forest
which your coverage will automatically renew products, and animals for sport, show, or
unless canceled in writing by either you or us pets.
Page 4 of 55Commodity code - A code designating an Direct marketing sales records -
agricultural product that qualifies as a Contemporaneous records that document
commodity for the commodity count the sale of commodities through direct
calculations. A commodity code may have marketing. If you sell a commodity through
more than one associated rate code. direct marketing, you must provide the
Commodity count - The number of contemporaneous records used to determine
commodities on your farm operation, as allowable revenue on the Schedule F farm
determined in accordance with section 19(c). tax form.
Consent - Approval in writing by us allowing Disinterested third party - A person that
you to take a specific action. does not have any familial relationship
Contemporaneous records - Written (parents, brothers, sisters, children, spouse,
records developed at the time the event grandchildren, aunts, uncles, nieces,
occurred, recording information such as nephews, first cousins, or grandparents,
planting of a commodity, harvested related by blood, adoption or marriage, are
production, sale of a commodity, daily considered to have a familial relationship)
receipts, etc. with you and who will not benefit financially
Contract change date - The date by which from the sale of the insured commodity.
changes to the policy, if any, will be made Disregarded entity - A single-member tax
available. entity that does not elect to be treated as a
Contract grower - A person retained under corporation for income tax purposes and files
contract to manage the growth of a taxes under another entity name.
commodity owned by another person. Diversification discount - The discount to
Controlled substance - Any substance your farm premium rate that your farm
whose manufacture, distribution, or use is operation qualifies for based on your
federally regulated under the Controlled commodity count, as determined in
Substances Act. accordance with section 19(c).
Cooperative Extension System - A Early fiscal year filer - An insured, other
nationwide network consisting of a state than a calendar year filer, that files taxes with
office located at each state’s land-grant a fiscal year that begins prior to September 1.
university, and local or regional offices. End of insurance period, date of - The date
These offices are staffed by one or more upon which your insurance coverage ceases
agricultural experts, who work in cooperation for the policy year.
with the National Institute of Food and Ending accounts payable - Allowable
Agriculture, and who provide information to expenses, supported by verifiable records,
agricultural producers and others. you incurred during the insurance period but
County - Any county, parish, political that have not been paid at the end of the
subdivision of a state, or other area specified insurance period.
in the actuarial documents. Ending accounts receivable - Allowable
Damage - Injury, deterioration, or loss of revenue, supported by verifiable records, you
production of an insured commodity due to earned during the insurance period, but that
insured or uninsured causes. has not been received at the end of the
Days - Calendar days. insurance period. This amount includes the
Deductible - The deductible is equal to your value of ending inventory that is under a
approved revenue minus your insured marketing contract with a buyer to be
revenue. Your deductible represents the purchased at a specified price.
amount of your approved revenue that is not Ending inventory - The commodities you
insured by this policy. produced during the insurance period, but
Delinquent debt - Has the same meaning as that have not been sold or otherwise
the term defined in 7 CFR part 400, subpart disposed of at the end of the insurance period
U. and supported by verifiable records, and
Direct marketing - Marketing commodities reported on the Inventory Report as ending
directly to consumers without the inventory. Any commodity that is under a
involvement of a third party (e.g., farmer’s marketing contract with a buyer to be
markets, u-pick, roadside stands, internet purchased during the insurance period at a
sales, etc.). price that will not be determined until
Page 5 of 55subsequent policy years will be considered Intended Farm Operation Report, Revised
as ending inventory. Farm Operation Report, and Final Farm
Expanded operation adjusted revenue - Operation Report, with each part due at the
The average allowable revenue adjusted to time specified in these provisions.
reflect physical expansion of the farm Farm tax forms - IRS income tax forms
operation. (such as Form 1040, Form 1120, Form 1041,
Expanding operation factor - A factor that Form 1065, Form 1102S, and Form 4835)
is used to calculate the expanded operation used to report farm revenue and expenses
adjusted revenue for farm operations that are for a signed and filed Federal tax return,
physically expanding. specifically including Schedule F (Form
Expected revenue - The amount of revenue 1040) but also other forms used to report
you expect to receive from a commodity, as farm revenue and used under this policy to
stated on your Farm Operation Report. develop a Substitute Schedule F, if needed.
Expected value - The price that you expect Fiscal year - A period of 12 consecutive
to receive for a commodity, determined in months used for accounting and tax
accordance with the expected value purposes, and ending on the last day of the
guidelines in section 18, less the cost of all twelfth month provided the twelfth month is
post-production expenses. not December (a twelve-month period ending
Expected Yield - The yield that you the last day of December is a calendar year).
reasonably expect your insured commodity to Farm Service Agency (FSA) - An agency of
produce under normal growing conditions in the USDA, or a successor agency.
the insurance period, determined in Generally recognized - When agricultural
accordance with the expected yield experts or organic agricultural experts, as
guidelines in section 18. applicable, are aware of the production
Expense trend factor - A factor that is used method or practice and there is no genuine
to measure the year to year growth in dispute regarding whether the production
expenses of your farm operation. method or practice allows the commodity to
Expense reduction factor - A factor that is make normal progress toward maturity.
used to reduce the approved revenue for Good farming practices - The production
claim purposes when allowable expenses for methods utilized to produce the insured
the policy year are less than 70 percent of commodities and allow them to make normal
approved expenses. progress toward maturity resulting in at least
Familial relationship - Your parents, the approved revenue, which are: (1) For
brothers, sisters, children, spouse, conventional or sustainable farming
grandchildren, aunts, uncles, nieces, practices, those generally recognized by
nephews, first cousins, or grandparents, agricultural experts for the area; or (2) for
related by blood, adoption, or marriage. organic farming practices, those generally
Farm premium rate - The premium rate for recognized by organic agricultural experts for
coverage under this policy calculated based the area or contained in the organic plan. We
on the commodities on your farm operation. may, or you may request us to, contact FCIC
Farm operation - All farming activities for to determine whether or not production
which revenue and expenses are reported to methods will be considered “good farming
the IRS under a single taxpayer identification practices”.
number will be considered a single farm Industrial Hemp - the plant Cannabis sativa
operation for WFRP purposes (e.g., a L. and any part of that plant, including the
partnership filing a U.S. tax return for seeds thereof and all derivatives, extracts,
partnership income that includes revenue cannabinoids, isomers, acids, salts, and salts
and expenses from separate row crop, of isomers, whether growing or not, with a
perennial crop and livestock farms is a single delta-9 tetrahydrocannabinol (THC)
farm operation because it files one tax concentration of not more than 0.3 percent on
return). a dry weight basis.
Farm Operation Report - The form on which Household - A domestic establishment
you provide all required information regarding including individuals with a familial
the commodities you expect to earn revenue relationship and others who live on the same
from during the insurance period. The Farm property.
Operation Report consists of three parts, the
Page 6 of 55Indexed average revenue - The average commodity is produced. Market readiness
revenue for all years in your whole farm operations do not include any activities that
history-period after any adjustment to reflect occur off-farm or on-farm that increase the
revenue growth during the whole-farm history value of the crop, such as canning, freezing,
period. and processing activities that alter the
Indexed revenue - The allowable revenue of physical nature of insurable commodities
a tax year adjusted to reflect revenue growth including, but not limited to, slicing apples,
during the whole-farm history period. putting commodities into gift baskets, jams,
Insurable interest - Your percentage of a jellies, wine, or cider, etc.
commodity that is at financial risk of loss. Marketing contract - A written agreement
Insurance period - The 12 month period between you and a buyer for the purchase of
corresponding to your tax year beginning in a commodity you will produce on your farm
the calendar year in which the sales closing operation at a specified price.
date occurs. National Organic Program (NOP) - A
Insured - The named person as shown on regulatory program housed within the USDA
the application accepted by us. This term Agricultural Marketing Service, responsible
does not extend to any other person having a for developing national standards for
share or interest in the crop such as, a organically-produced agricultural products.
partnership, landlord, or any other person, Native sod - Acreage that has no record of
unless specifically indicated on the being tilled (determined in accordance with
application accepted by us. information collected and maintained by an
Insured commodity - A commodity you will agency of the USDA or other verifiable
produce or purchase for resale during the records that you provide and are acceptable
insurance period. to us) for the production of an annual crop on
Insured revenue - The total amount of or before February 7, 2014, and on which the
insurance provided to you by this policy. plant cover is composed principally of native
Intended commodity - A commodity you grasses, grass-like plants, forbs, or shrubs
reported on your Intended Farm Operation suitable for grazing and browsing.
Report. Negligence - The failure to use such care as
Internal Revenue Service (IRS) - A bureau a reasonably prudent and careful person
of the United States Department of the experienced in the production of commodities
Treasury. would use under similar circumstances.
Inventory Report - The form on which you Net value - Value of a commodity at the
provide all required information regarding the beginning of the insurance period minus the
beginning inventory and ending inventory of cost of the commodity.
your farm operation. Noninsured Crop Disaster Assistance
Lag year - The tax year immediately Program (NAP) - A program administered by
preceding the insurance period. FSA which provides financial assistance to
Late fiscal year filer - An insured that files producers of crops that do not have a
taxes with a fiscal year that begins permanent crop insurance program available
September 1 or later. or, is such coverage is available, it is only
Limited resource farmer - Has the same available under a policy that provides
meaning as the term defined by USDA at coverage for specific intervals based on
http://lrftool.sc.egov.usda.gov or a successor weather indexes or this policy.
website. Notice of loss - A written notice you are
Local market price - The average price required to file in your agent's office
offered by buyers of the commodity in the whenever you initially discover that any
area where you normally sell that commodity. commodity insured under this policy has
Market readiness operations - The on-farm been damaged by a cause of loss that could
activities that are the minimum required to result in a loss of production or reduction in
remove the commodity from the field and value or that your allowable revenue for the
make the commodity market ready, such as policy year may be less than your insured
washing, packing, etc. Since it is the revenue.
minimum required to remove the commodity Nursery and greenhouse commodities -
from the field, the activity must occur on or in Plants which are propagated or grown to be
close proximity to the field where the sold as plants, not including commodities
Page 7 of 55produced by plants (e.g., tomato plants, but operation, and consisting of the application
not tomatoes). For the purposes of this accepted by us, these Basic Provisions, the
policy, plants for nursery and greenhouse Special Provisions, any other applicable
commodities must be propagated or grown in endorsements or options, the actuarial
a controlled environment. documents and the applicable regulations
Offset - The act of deducting one amount published in 7 CFR chapter IV. All farm
from another amount. revenue will be insured under one policy.
Organic agricultural experts - Persons who Policy year - The policy year is the calendar
are employed by the following organizations: year that begins after the contract change
Appropriate Technology Transfer for Rural date (for late fiscal year filers the policy year
Areas, Sustainable Agriculture Research and will differ from the tax year insured under this
Education or the Cooperative Extension policy).
System, the agricultural departments of Post-production operations - Any
universities, or other persons approved by operations not included in the definition of
FCIC whose research or occupation is market readiness operations, performed after
related to the specific organic crop or practice producing and harvesting an insured
for which such expertise is sought. commodity to prepare it for sale. These
Organic farming operation - An operation include, but are not limited to, any activity
that uses organic farming practices to occurring on-farm or off-farm to prepare the
produce organic commodities. commodity for sale or any activity that
Organic farming practice - A system of increases the value of the crop, such as
plant or animal production practices used to canning, freezing, and processing activities
produce the commodity that is reviewed by a that alter the physical nature of insurable
certifying agent in accordance with 7 CFR commodities such as slicing apples, putting
part 205. commodities into gift baskets, making jams,
Organic system plan - A written plan, in jellies, wine, or cider, or costs for cold and
accordance with the National Organic controlled atmosphere storage.
Program published in 7 CFR part 205, which Premium billing date - The earliest date
describes the organic farming practices and upon which you will be billed for insurance.
is reviewed annually, or at other times The premium billing date is contained in the
specified on the certificate, by a certifying actuarial documents.
agent. Prepaid expenses - Expenses relating to
Organic standards - Standards in insured commodities that have been paid
accordance with the Organic Foods prior to the beginning of the insurance period.
Production Act of 1990 (7 U.S.C. 6501 et Produced - An insured commodity will be
seq.) and 7 CFR part 205. considered produced when it has matured to
Originating entity - An entity that actually the extent that it is generally saleable at
physically produces the commodity. established markets, regardless of whether
Pass-through entity - An entity that reports or not it is actually harvested by the end of
to the IRS but does not pay taxes on portions the insurance period.
of the revenue, instead passing it to each Production capacity - Physical land or
individual owner who then pays income tax structures used for the production of
on their portion of the revenue from the commodities on your farm operation.
business. Prohibited substance - Any biological,
Perennial commodity - A commodity chemical, or other agent that is prohibited
produced on a plant, bush, tree, or vine that from use by Federal statute or is not included
has a lifespan of more than one year, as in the organic standards for use on any
identified in the actuarial documents. certified organic, transitional or buffer zone
Person - An individual, partnership, acreage. Lists of such substances are
association, corporation, estate, trust, or contained at 7 CFR part 205.
other legal entity, and wherever applicable, a Qualifying revenue threshold - The
State or a political subdivision or agency of a minimum amount of revenue a commodity
State. “Person” does not include the United must be expected to generate to qualify as a
States Government or any agency thereof. commodity for the purpose of your
Policy - The agreement between you and us commodity count, as determined in
to insure all insurable revenue on the farm accordance with section 19(b).
Page 8 of 55Rate code - A code designating a specific spouse was one of the individuals that made
commodity, type, and practice for premium up the partnership. However, if each
rate calculations. Each rate code has an partnership is made up of six individuals with
associated premium rate specified in the equal interests, then each would only have
actuarial documents. an 8.33 percent interest in you and although
Replanted commodity - The same annual the partnership would still have a substantial
commodity replanted on the same acreage beneficial interest in you, the individuals
as the first insured commodity for harvest in would not). The spouse of any individual
the same insurance period. applicant or individual insured will be
Replanting - Performing the cultural presumed to have a substantial beneficial
practices necessary to prepare the land and interest in the applicant or insured unless the
then replacing the seed or plants of the spouses can prove they are legally separated
damaged or destroyed commodity on the or otherwise legally separate under the
same acreage. applicable state dissolution of marriage laws.
Revenue trend factor - A factor that is used Any child of an individual applicant or
to measure the year to year growth in individual insured will not be considered to
revenue of your farm operation. have a substantial beneficial interest in the
RMA’s website - A website hosted by RMA applicant or insured unless the child has a
and located at https://www.rma.usda.gov/ or separate legal interest in such person.
a successor website. Substitute Schedule F - A form used in
Sales closing date - The date contained in place of a Schedule F form if you file farm tax
the actuarial documents for your tax filer type forms for your farm operation that do not
by which an application must be filed and the include a Federal Schedule F tax form.
last date by which you may change your Summary of coverage - Our statement to
coverage for a policy year. you, based upon your Farm Operation Report
Schedule F - A tax form commonly used to that provides specific information about your
file Federal taxes for a farm. policy including the amount of insurance
Short tax year - A period of less than twelve coverage.
consecutive months for which a tax entity Tax entity - Any person that has a tax
may be required to file a tax return due to reporting requirement.
changing from a calendar year to fiscal year Tax filer type - The type of tax filer you are
or vice versa or from changing the dates of a for purposes of this policy, determined
fiscal year. according to your tax year. The tax filer types
Simple average allowable revenue - The are calendar year filer, early fiscal year filer,
simple average of the allowable revenue for and late fiscal year filer.
all years in your whole-farm history period. Tax year - The annual accounting period for
Simple average indexed revenue - The the farm operation defined by the 12 month
simple average of the indexed revenue for all period used for tax purposes. The tax years
years in your whole-farm history period. are: (1) a calendar year; or (2) a fiscal year.
Special Provisions - The part of the policy For the purposes of this policy, tax years are
that contains specific provisions of insurance designated by the calendar year in which the
that may vary by geographic area or as 12 month period begins (for example, if you
specified in the policy. are a fiscal year filer with a 12 month
Substantial beneficial interest - An interest accounting period beginning November 1,
held by any person of at least 10 percent in your 2017 tax year is the 12 month period
you (e.g., there are two partnerships that beginning November 1, 2017
each have a 50 percent interest in you and Termination date - The date contained in the
each partnership is made up of two actuarial documents upon which your
individuals, each with a 50 percent share in insurance ceases to be in effect because of
the partnership. In this case, each individual nonpayment of any amount due us under the
would be considered to have a 25 percent policy, including premium.
interest in you, and both the partnerships and Total expected revenue - The total amount
the individuals would have a substantial of expected revenue you expect to receive
beneficial interest in you. The spouses of the from all commodities on your farm operation
individuals would not be considered to have during the insurance period, as stated on
a substantial beneficial interest unless the your Farm Operation Report, including
Page 9 of 55expected revenue from commodities lost due Whole-Farm History Report - The report
to a covered cause of loss. that documents your farm operation’s
Transitional acreage - Acreage on which allowable revenue and allowable expenses
organic farming practices are being followed for each tax year used to determine your
but the acreage does not yet qualify to be whole-farm historic average revenue and
designated as certified organic acreage. average allowable expenses and other
Verifiable records - Contemporaneous information necessary to determine your
records provided from a disinterested third whole-farm historic average revenue and
party, such as records from a warehouse, expenses.
processor, packer, broker, input vendor, etc., 2. Application.
or by measurement of farm-stored (a) For your initial year of insurance, you
commodities. Except for commodities sold must provide the completed, signed,
through direct marketing, if you process or application to your agent not later than
pack your insured commodities, you must the sales closing date for your tax filer
provide final settlement sheets showing type.
disposition of the insured commodities and (b) If voidance, cancellation or termination of
marketing records reconcilable with revenue insurance coverage occurs for any
reported for tax purposes for your farm reason, including but not limited to
operation. indebtedness, suspension, debarment,
Vertically integrated operation - A person disqualification, cancellation by you or us
that has a substantial beneficial interest in or your policy is voided due to a
multiple entities that may buy and sell conviction of the controlled substance
commodities from each other or move provisions of the Food Security Act of
commodities from one entity to the other to 1985 or Title 21, a new application must
conduct post-production operations on the be filed for the crop.
commodities. (1) Insurance coverage will not be
Veteran farmer or rancher - An individual provided if you are ineligible under
who has served active duty in the United the contract or under any Federal
States Army, Navy, Marine Corps, Air Force, statute or regulation.
or Coast Guard, including the reserve (2) Since applications for crop insurance
components, was discharged or released cannot be accepted after the sales
under conditions other than dishonorable, closing date, if you make any
and: premium payment, or you otherwise
(1) Has not operated a farm or ranch; become eligible, after the sales
(2) Has operated a farm or ranch for not closing date, you cannot apply for
more than 5 years; or insurance until the next policy year.
(3) First obtained status as a veteran For example, for the 2012 policy
during the most recent 5-year period. A year, if crop A, with a termination
person, other than an individual, may be date of October 31, 2012, and crop
eligible for veteran farmer or rancher B, with a termination date of March
benefits if all substantial beneficial 15, 2013, are insured and you do not
interest holders qualify as a veteran pay the premium for crop A by the
farmer or rancher. A spouse’s veteran termination date, you are ineligible
status does not impact whether an for crop insurance as of October 31,
individual is considered a veteran farmer 2012, and crop A’s policy is
or rancher. terminated as of that date. Crop B’s
Void - When the policy is considered not to policy does not terminate until March
have existed for a policy year. 15, 2013, and an indemnity for the
Whole-farm historic average revenue and 2012 policy year may still be owed.
expenses - The historic, average allowable You will not be eligible to apply for
revenue and allowable expenses generated crop insurance for any crop until after
from the farm operation, adjusted according the amounts owed are paid in full or
to this policy, and stated on the Whole-Farm you file a petition to discharge the
History Report. debt in bankruptcy.
Whole-farm history period - The five (c) To change your coverage in a
consecutive tax years prior to the lag year. subsequent policy year, you must
Page 10 of 55provide a policy change form reflecting revenue at the time the Revised
the changes by the sales closing date or Farm Operation Report is
the policy terms from the previous policy submitted will be used for rating
year will remain in effect. purposes.
(d) You must include the following (e) With respect to SSNs or EINs required on
information on your application for your application:
insurance or your application will not be (1) Your application will not be accepted
accepted and no coverage will be and no insurance will be provided for
provided: the year of application if the
(1) The coverage level; application does not contain your
(2) Your social security number (SSN) if SSN or EIN. If your application
you are an individual. If you are an contains an incorrect SSN or EIN for
individual applicant operating as a you, your application will be
business, you must provide an considered not to have been
employer identification number (EIN) accepted, no insurance will be
and you must also provide your SSN; provided for the year of application
(3) Your EIN if you are a person other and for any subsequent policy years,
than an individual; and as applicable, and such policies will
(4) The following for all persons who be void if:
have a substantial beneficial interest (i) You do not correct the number;
in you: or
(i) The SSN for individuals; or (ii) You correct the SSN or EIN but:
(ii) The EIN for persons other than (A) You cannot prove that any
individuals and the SSNs for all error was inadvertent
individuals that comprise the (Simply stating the error was
person with the EIN if such inadvertent is not sufficient
individuals also have a to prove the error was
substantial beneficial interest in inadvertent); or
you; (B) It is determined that the
(iii) Any child of yours will not be incorrect number would
considered to have an interest in have allowed you to obtain
you, unless the child has a disproportionate benefits
separate legal interest in you. under the crop insurance
(5) Whether your farm taxes, in program, you are
accordance with this policy, are filed determined to be ineligible
as a: for insurance or you could
(i) Calendar year filer; avoid an obligation or
(ii) Early fiscal year filer; or requirement under any State
(iii) Late fiscal year filer. or Federal law; and
(6) Any other material information (2) With respect to persons with a
required on the application for this substantial beneficial interest in you:
policy. (i) If the SSNs or EINs of such
(7) The county listed on the application persons are included on your
should be the county where the application and the SSNs or
majority of the total expected EINs are correct, but the persons
revenue is expected to be earned: with a substantial beneficial
(i) If no county is expected to interest in you are ineligible for
provide the majority of the total insurance, the insurance
expected revenue, the county coverage for all revenue
listed on the application should included on your application will
be the county with the highest be reduced proportionately by
amount of expected revenue; the percentage interest in you of
and persons with a substantial
(ii) Regardless of the county listed beneficial interest in you
on the application, the county (presumed to be 50 percent for
with the highest expected spouses of individuals);
Page 11 of 55(ii) Your policy will be void if the certify to an incorrect SSN or EIN or any
SSN or EIN of any person with a other information under this policy.
substantial beneficial interest in (h) If any of the information regarding
you is incorrect or is not included persons with a substantial beneficial
on your application and: interest in you, changes:
(A) The number is not corrected (1) After the sales closing date from the
or provided by you, as previous policy year, you must revise
applicable; your application by the sales closing
(B) You cannot prove that any date for the current policy year to
error or omission was reflect the correct information; or
inadvertent (Simply stating (2) Less than 30 days before the sales
the error or omission was closing date for the current policy
inadvertent is not sufficient year, you must revise your
to prove the error or application by the sales closing date
omission was inadvertent); for the next policy year; and
(C) Even after the correct SSN (3) You fail to provide the required
or EIN is provided by you, it revisions, the provisions in section
is determined that the 2(f) will apply;
incorrect or omitted SSN or (i) If you are, or a person with a substantial
EIN would have allowed you beneficial interest in you is, not eligible to
to obtain disproportionate obtain a SSN or EIN, whichever is
benefits under the crop required, you must request an assigned
insurance program, the number for the purposes of this policy
person with a substantial from us:
beneficial interest in you is (1) A number will be provided only if you
determined to be ineligible can demonstrate you are, or a
for insurance, or you or the person with a substantial beneficial
person with a substantial interest in you is, eligible to receive
beneficial interest in you Federal benefits;
could avoid an obligation or (2) If a number cannot be provided for
requirement under any State you in accordance with (1) your
or Federal law; or application will not be accepted; or
(D) Except as provided in (3) If a number cannot be provided for
sections 2(e)(2)(ii)(B) and any person with a substantial
(C), your policies will not be beneficial interest in you in
voided if you subsequently accordance with (1), the amount of
provide the correct SSN or insurance for all commodities on the
EIN for persons with a application will be reduced
substantial beneficial proportionately by the percentage
interest in you and the interest of such person in you.
persons are eligible for (j) You must provide information to us
insurance; regarding insurance you obtained from
(f) Your approved revenue will be reduced any other insurance provider or from any
proportionately by the percentage FSA office on commodities insured by
interest in you of persons with a this policy. The information provided
substantial beneficial interest in you if must include the date such insurance
such persons are ineligible for insurance was obtained.
as long as: (k) If your farm operation is vertically
(1) The SSN’s or EIN’s of such persons integrated, or you own or have interest in
are included on your application; related tax entities, you must clearly
and, identify and explain the relationship
(2) The SSN’s or EIN’s are correct. between such entities at the time you file
(g) Notwithstanding any of the provisions in your application.
this section, you may be subject to civil, (l) Your application will not be accepted,
criminal or administrative sanctions if you and no coverage will be provided, if you
Page 12 of 55are ineligible under the contract or under (5) You are a qualifying person that is
any Federal statute or regulation. not required to file a United States
3. Qualifying Person Criteria and Insurance Federal income tax return because
Eligibility. you are not subject to income tax
(a) To be considered a qualifying person, (e.g., a tribal entity) and:
you must: (i) You must have filed reports with
(1) Be eligible to receive federal a disinterested third party entity
benefits; supported by verifiable records
(2) Be a U.S. citizen or resident; that we agree are sufficient to
(3) File either a Schedule F tax form or develop a Substitute Schedule F
other farm tax forms that can be for each year in your whole-farm
converted to a Substitute Schedule history period; and
F; (ii) The reports used to develop your
(4) The Schedule F, or Substitute Substitute Schedule F will be
Schedule F, must cover 100 percent considered your farm tax forms
of your farm operation. (A tax entity under this policy;
which reports a fractional share of (6) You did not file farm tax forms or
farming activity conducted by a report farm revenue for a tax year
partnership, corporation or any other due to circumstances beyond your
“joint venture” does not qualify for control (e.g., illness that prevented
WFRP coverage); you from farming for the year)
(5) Be engaged in the business of provided:
farming and derive revenue from the (i) You only have one year in your
production of commodities; and whole-farm history period in
(6) Derive not more than 50 percent of which you did not file farm tax
expected revenue from commodities forms; and
purchased for resale. (ii) You have filed farm tax forms in
(b) To be eligible for insurance under this the first year of your whole-farm
policy you must be a qualifying person history period, unless you are a
that has filed a United States Federal carryover insured; and
income tax return, including farm tax (iii) You must have earned farm
forms, for each of the five years of your revenue during your lag year; or
whole-farm history period for the same (7) You qualify as a beginning farmer or
tax entity and farm operation as the rancher or veteran farmer or rancher,
insured person for the policy year unless or you qualified as a beginning
one of the following applies: farmer or rancher or veteran farmer
(1) Your tax entity (taxpayer or rancher in the previous policy
identification number) changed (e.g., year, and you have fewer than five
you and your spouse form a years of farm tax forms in your whole
partnership and file a U.S. farm history period provided:
Partnership Return of Income and (i) You provide your farm tax forms
you previously filed a U.S. Individual for each year in your whole-farm
Income Tax Return that included history period in which you
your spouse’s interest in the farm reported farm revenue; and
operation); (ii) You have at least three years of
(2) You stop farming as an individual farm tax forms in your whole-
and farm as a tax entity other than an farm history period and must
individual; have earned farm revenue
(3) You form a successor farming during your lag year.
operation that is a different tax entity (c) Your farm operation will be ineligible for
but is basically the same operation; insurance under this policy and no
(4) You purchase, inherit, or lease coverage will be provided if:
another person’s farm operation and (1) Your insured revenue will be greater
your use of their records is approved than $8.5 million on the sales closing
in accordance with section 16(g); date, based on your Intended Farm
Operation Report;
Page 13 of 55(2) Your commodity count, as from disregarded entities may be insured
determined using your Intended by an entity that files farm tax forms that
Farm Operation Report, equals one includes such revenue.
and; 4. Life of Policy, Termination, and
(i) Potatoes are the only commodity Cancellation.
with expected revenue that (a) After we have accepted your application,
equals or exceeds your you may not cancel this policy for the
qualifying revenue threshold. initial policy year.
(This limitation is a legislated (b) This is a continuous policy and will
requirement under section remain in effect for each succeeding
508(a)(3)(C) of the Act); policy year following the acceptance of
(ii) Revenue protection is available the original application until canceled by
under another policy offered you or us in accordance with the terms of
under the authority of the Act for the policy. In accordance with section 5,
the commodity with expected FCIC may change the coverage provided
revenue that equals or exceeds from year to year.
your qualifying revenue (c) Either you or we may cancel this policy
threshold; after the initial policy year by providing
(3) You elected CAT coverage for written notice to the other on or before
another policy offered under the the cancellation date.
authority of the Act that could provide (d) We may cancel your policy if no premium
coverage to any insurable is earned for 3 or more consecutive
commodity during the insurance policy years.
period, whether acreage was planted (e) If any amount due, including premium or
or not; or administrative fees, or overpaid
(4) Your farm operation includes any indemnities, is not paid or an acceptable
revenue from controlled substances arrangement for payment is not made on
(The plant Cannabis sativa L. is not or before the termination date for the
a controlled substance when it policy year on which an amount is due,
qualifies as industrial hemp. See you will be determined to be ineligible to
section 50 for rules specific to participate in any crop insurance
industrial hemp). program authorized under the Act in
(d) You will not be considered a qualifying accordance with 7 CFR part 400, subpart
person for this policy year if the tax year U.
corresponding to the insurance period (1) For a policy with unpaid
will be a short tax year. If you have any administrative fees or premium, the
short tax years in your history or the lag policy will terminate effective on the
year is a short tax year: first day of the policy year
(1) You must resubmit your whole-farm immediately subsequent to the policy
history based on the calendar or year for which such amount was due
fiscal year used for the policy year; (insurance will be considered not to
(2) The whole-farm history must have attached in the subsequent
accurately reflect the income from year and no premium will be owed or
the calendar or fiscal year; and indemnity paid);
(3) We may, at our discretion and based (2) For a policy with other amounts due,
on your resubmitted records, allow the policy will terminate effective on
you to obtain insurance. the termination date immediately
(e) Originating pass-through entities may after the account becomes
insure the allowable revenue from delinquent;
commodities produced by the farm (3) Ineligibility will be effective as of the
operation under WFRP. Owners of a date that this policy was terminated
pass-through entity that are not the and for all other insurance policies
originating entity may not insure pass- with coincidental termination dates;
through revenue or loss under WFRP. (4) All other crop insurance policies that
(f) Disregarded entities are not considered are reinsured by FCIC under the
qualifying persons. Allowable revenue authority of the Act will also terminate
Page 14 of 55You can also read
