RMA introduces Micro Farm Program (Choice Voice)

(Editor’s note: Paul Goeringer is a University of Maryland Extension Legal Specialist Agricultural, Resource Economics. This column should not be interpreted as legal or financial advice for the reader.)

A new crop insurance product is available nationwide for those operations with approved revenue up to $100,000.
The new Micro Farm Program provides a risk management safety net for all commodities grown on the farm under one policy.
The new risk management tool is tailored to smaller operations, especially those diversified specialty crops or organic operations.
The sales closing date is March 15, and those growers interested should consider talking to their local crop insurance agent.
The Micro Farm Program offers coverage for all commodities grown on the operation under one policy with up to $100,000 in approved revenue in the initial year of coverage and $125,000 if you had a range the previous year.
Micro Farm Program provides coverage from loss of revenue that you earn or expect to earn from all commodities on the farm, commodities you produce during the insurance period, whether they are sold or not, and commodities you buy for resale during the insurance period.
Not included in coverage would be timber, forest, forest products, and animals for sport, show or pets.
With the Micro Farm Program, the insured income will be the total amount of coverage provided by the policy.
To determine the insured income, your crop insurance agent will need to determine your approved income. Approved income will be determined based on the Whole-Farm History Report Farm Operation Report and multiplied by the coverage level (50 to 85 percent).
For example, based on your Whole-Farm History Report and Farm Operation Report, your approved revenue for a diversified vegetable operation is $85,000.
If your coverage level is 75 percent, your insurable income would be $63,750.
If the operation suffers a loss and income is $60,000 for the year, the Micro Farm Program will cover $3,750 of the loss.
You will need to have three consecutive years of your Schedule Fs or other farm tax forms to be eligible.
For 2022, you will need to supply 2019 to 2021.
If you have not filed taxes for 2021, you can use a substitute Schedule F for 2021.
You will also need to complete the Whole Farm History Report and any additional information required to show that your farm tax forms are accurate.
Producers will need to be United States citizens or resident aliens and eligible for Federal benefits.
Those entities that are vertically integrated would not be eligible for MFP.
If you have already purchased other federal crop insurance policies, you would not be suitable for MFP.
Finally, an operation receiving 51 percent of total revenue from commodities purchased for resale would not be eligible for MFP.
If the operation has been expanding over time, the producer may be allowed to increase the approved revenue amount based on an indexing procedure.
The indexing procedure requires five consecutive years of revenue history and measures the operation’s growth over this period.
For those small diversified operations with total revenue of $100,000 or less, MFP might be a good option for these operations to consider as a part of a risk management plan.
You can learn more about it by looking at the fact sheet available on the RMA website.
You can also consider talking to your crop insurance agent about this new program to see if it works for you.
If you do not have an agent, a list is available at all USDA Service Centers and online at www.rma.usda.gov/Information-Tools/Agent-Locator-Page.
(Note: This material is funded in partnership by USDA, Risk Management Agency, under award number RMA21CPT0011599.)