Farmers should take special note of crop insurance this year because it could provide them with a much-needed safety net at a time of low commodity prices and continuing market uncertainty, a Purdue Extension agricultural economist says.
Farmers have until March 15 to apply for federal crop insurance or to make changes to current policies.
“Choosing the right coverage is more important now than it has been in the past few years because producers simply cannot afford increased downside risk,” Michael Langemeier said. “A variety of options are available.”
The federal crop insurance program, administered by the U.S. Department of Agriculture’s Risk Management Agency, is intended to protect farmers from catastrophic yield or revenue losses. The program was expanded in the 2014 farm bill to replace many direct-subsidy payments.
One new coverage option is the Whole-Farm Revenue Protection program, known as the WFRP. It was introduced as a pilot program in 45 states last year but will be available throughout the country for the first time in 2016.
Unlike traditional revenue or yield coverage, WFRP covers the entire mix of crop and livestock produced on a farm, not a specific commodity. Producers can insure up to $8.5 million of revenue, with coverage levels of 50-85%. Premium payments are subsidized up to 80%.
“It’s a particularly attractive option for diversified, specialty crop and organic producers because it covers a wider range of commodities,” Langemeier said.