DEPARTMENT OF AGRICULTURE FEDERAL CROP INSURANCE CORPORATION WHOLE-FARM REVENUE PROTECTION PILOT POLICY

 
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 55
TABLE 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 55
Terms 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 55
Beginning 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 55
Commodity 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 55
subsequent 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 55
Indexed 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 55
produced 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 55
Rate 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 55
expected 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 55
provide 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 55
are 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 55
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