On September 16, 2020, the Risk Management Agency (RMA) issued a press release announcing improvements to the Whole-Farm Revenue Protection (WFRP) program beginning with the 2021 crop year. https://www.rma.usda.gov/News-Room/Press/Press-Releases/2020-News/USDA-Announces-Whole-Farm-Revenue-Protection-Program-Improvements. RMA stated it held meetings with stakeholders who recommended decreasing reporting requirements for yield and revenues for each commodity because of its adverse affect on direct marketers. RMA states that the modifications allow growers to report two or more direct-marketed commodities as a combined single commodity code with a combined expected revenue for all commodities. RMA also states that the combined direct-marketed commodities will count as two commodities in calculating the diversification premium discount. RMA states that under WFRP, farms with two or more commodities receive a premium rate discount, reflecting the lower risk of revenue loss due to the farm’s diversification and that the revenue history will be based on reported revenue from the combined direct-marketed commodities and total acres planted to those commodities. RMA states that this lessens reporting burdens by alleviating the requirement to report detailed sales or yield records from any specific commodity reported under the direct market commodity code.
ANALYSIS – From reading the press release it is not clear exactly what has been done. However, reading the 2021 WFRP policy, producers are allowed to combine two or more commodities that are direct marketed as a single combined commodity code that will count as two commodities, regardless of the number of commodities actually combined. The combined commodities are not required to have separate expected value and expected yield. Presumably this will reduce the reporting burden.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.