Today, the United States Department of Agriculture (USDA) announced new insurance policies for small farms. the Department Risk Management Agency (ARM) created the policy based on feedback from local producers and research led by the 2018 Farm Bill.
Richard Flournoy, the acting administrator of the RMA, says that while conducting the research, the RMA was tasked with finding ways to provide crop insurance to growers who sell locally. But it turned out to be more complicated than it seemed at first glance. “Local food has a lot of different definitions. If I sell locally and have internet sales how do you really define that? ” he says.
New updated insurance policies, offered through the Income protection for the whole farm (WFRP) – will be available to farmers who report less than $ 100,000 in income per year, rather than having to define what constitutes a “local sale”. RMA research shows that 85 percent of smallholder farmers report less than $ 75,000 in gross sales, so they set the income limit in an effort to include as large a portion of smallholder farmers as possible. Eligible producers also have proof of sales in their area for at least three years. Earlier this year, the RMA also extensive coverage for organic and aquaculture farmers under the WFRP.
In addition to providing crop coverage, Flournoy says the insurance is also aimed at reducing the paperwork required for farmers, which can be a burden on small farms. “You have to keep records for each product, and a lot of these growers grow a lot of different crops,” says Flournoy. With the new coverage, farmers no longer have to “enter and report on a per-crop basis; we only report for your top level farming operation.
Reducing red tape is the main recommendation of the Feasibility of ensuring local food production report that RMA released last January. The report also examines the economic impacts of local food systems, distribution channels and challenges on local foods, including COVID-19. He also makes some recommendations to Congress, including changing the documentation needed for post-production costs.
“Federal crop insurance has limits on what we can cover, and generally, once something leaves the field [or the tree], that’s when we do crop insurance, because we only cover risks in the field, ”explains Flournoy. The report found that if Congress “gave some leeway to cover different value-added things that a producer does, it would provide better coverage.”
The expanded RMA coverage, with a focus on reducing paperwork, is expected to have a major impact on smallholder farmers. More policy information is expected in November, and eligible producers will be able to apply through private crop insurance agents in January.