USDA: New Insurance Policy Aimed at Helping Small Farms

The U.S. Department of Agriculture (USDA) is rolling out a new insurance option specifically for small farms that sell their products locally.

USDA’s Risk Management Agency (RMA) created this new policy based on research directed by the 2018 Farm Bill, and it includes feedback from producers who grow for their local communities. The new Micro Farm policy simplifies record keeping and covers post-production costs like washing and value-added products, RMA said.

The policy will be available beginning with the 2022 crop year and is designed for agricultural producers who provide food to their local communities. The new policy is offered through Whole-Farm Revenue Protection (WFRP) and it has distinct provisions that can provide more access to the program, including:

• No expense or individual commodity reporting needed, simplifying the recordkeeping requirements for producers

• Revenue from post-production costs, such as washing and packaging commodities and value-added products, are considered allowable revenue.

The Micro Farm policy is available to producers who have a farm operation that earns an average allowable revenue of $100,000 or less, or for carryover insureds, an average allowable revenue of $125,000 or less. RMA’s research showed that 85% of producers who sell locally reported they made less than $75,000 in gross sales.

The Micro Farm policy builds on other RMA efforts to better serve specialty and organic crop growers. This includes WFRP, which provides coverage for producers with larger operations that may not be eligible for Micro Farm. RMA recently revised WFRP as part of a broader set of new policies and expanded policies to assist specialty crop and organic producers. For instance, it increased expansion limits for organic producers to the higher of $500,000 or 35%. Previously, small and medium size organic operations were held to the same 35% limit to expansion as conventional practice producers.

The Federal Crop Insurance Corp. approved the Micro Farm policy in late September.