Micro Farm (9110)

Overview

Beginning with the 2022 Reinsurance Year, the RMA introduced two commodity types under the WFRP (76) plan type: WFRP (0076) and Micro Farm (9110). Learn about the WFRP (0076) commodity.

Unlike the existing WFRP (0076) commodity type, the Micro Farm commodity type does not require diversification: the entire farm is covered by a single WFRP Micro Farm policy with no qualifying commodity counts. This is ideal for small operations with an approved revenue of $350,000 or less for their first year of coverage or $400,000 or less if they are a carryover insured (2022 and prior RYs are capped at $100,000 or less for their first year of coverage or $125,000 or less if they are a carryover insured).

Much of the System functionality for Micro Farm (9110) is similar to the existing functionality for WFRP (9110); however, Micro Farm is scaled back and has fewer data entry requirements.

To support Whole Farm Micro Farm, the following pages will display Micro Farm-specific fields.

To allow you to track production and print forms for WFRP Micro Farm policies that don't have an underlying MPCI policy, a Quote for APH Tracking checkbox displays on the Add New MPCI Quote page. When this checkbox is selected, you can set up detail lines and APHs for Whole Farm Micro Farm policies. This will also tell the System to roll the quote from year to year.

A WFRP Micro Farm policy is created from within an MPCI policy. To elect Micro Farm, in the Crop Name field, when available for the State/County/Crop, “Micro Farm” is available (a). Then, in the Crop Plan field, the only available plan to select is “WFRP (76)” (b).

Once Micro Farm is the selected crop and WFRP is the plan type, the Coverage Information section is updated to contain WFRP-specific fields:

• The PHTS/New Producer Request field (c), which has been available for other MPCI Plan Codes, is also displayed for Whole Farm(76). The Accounting Method field (f) is displayed so a user can select either “Cash Accounting” or “Accrual Accounting” as their accounting method for the year.
• The Tax Year field (d) is displayed; the Whole Farm plan type allows users to choose “Calendar Year”, “Early Fiscal Year”, or “Late Fiscal Year”. If “Early Fiscal Year” or “Late Fiscal Year” is selected, the Beginning Date and Ending Date fields also display for indicating the Fiscal Year dates.

NOTE: Early Fiscal Year filer is defined as producers with a tax year that begins February through August, and a Late Fiscal Year filer is defined as producers with a tax year that begins September through December. January is not included in the fiscal year definitions because producers with a tax year beginning in January are Calendar Year tax filers.

Similar to the WFRP (0076) coverages, the WFRP Micro Farm Coverages tab allows a user to view and/or maintain, when applicable, several aspects of the coverage such as the County, Crop, Plan, Coverage Level, Premium, and Transmission information. Additionally, Commodities and Income can be added from the WFRP Coverage Information grid.

On the Commodities tab, a user can add, edit, or delete the intended and revised Farm Operation Report values for all commodities on the coverage.

a. Commodity Row with Intended Values: Displays existing commodities on the policy. All commodities in a Micro Farm policy are listed under "Micro Farm"; however, for easier record keeping, the Commodity Description field permits the entry of a specific commodity type. The first line of a commodity row allows for keying of intended values.
b. Revision Row for Commodity: Allows user to key revised values for inclusion on the revised Farm Operation Report.
c. Add New Commodity Row: Allows the user to add a new commodity at either the SCD or the ARD. This blank row is always available at the bottom of the grid.
d. Revision icon: Adds a revision row to the corresponding commodity for keying revised values.
e. Delete icon: Deletes the row that corresponds with the icon. This might be a revision row or the entire commodity.
f. Insured & Agent Sign Dates: Allows the user to key sign dates for the revised Farm Operation Report.

The Income tab allows a user to enter the Insured’s allowable revenue from the Farm Operation Report for each year in the Whole Farm Micro Farm history period to calculate WFRP values.

  1. Allowable Revenue: For each tax year, this is the farm revenue, specified by the Micro Farm policy and including applicable adjustments, from the production of commodities produced by the Insured’s farm operation or purchased for further growth and development by the Insured’s farm operation, that the IRS requires the Insured to report on farm tax records. The total for all tax years displays in the Total row.

  2. Indexed Allowable Revenue: This column is used to calculate the Indexed Average Revenue(b1). Indexed Average Revenue is calculated for growers with increasing revenue to determine if increased coverage is applicable. As a reminder, not all growers qualify to use indexing procedures.

  3. Revenue Used: “Revenue Used” was modeled after the Yield Used column on the APH page and, when used in conjunction with the RS/RX column (not shown), is intended to show you whether RS and/or RX applies to a given year and the revenue amount used to calculate the RS and RX Avg Revenue or RS and RX Indexed Avg Revenue values.

    • If RS applies, the Revenue Used will be the Revenue Substitution value.
    • If RX applies, the Revenue Used will be $0 to indicate that the year was excluded in calculations.
    • If both RS and RX apply to a given year, then both the Revenue Substitution value and $0 will display in this column to show you which years were substituted and excluded in calculation of the RS/RX averages.
    • If RS or RX does not apply, the Indexed Allowable Revenue will display in this field, and if indexing does not apply, then the Allowable Revenue will display in this field.

  4. RS/RX: This column, not shown, shows you which years RS and/or RX applies to in the calculation of the RS Avg Revenue, RX Avg Revenue, Indexed RS Avg Revenue, and Indexed RX Average Revenue values at the bottom of the grid.

    • If RS is elected on the coverage and the Allowable Revenue/Indexed Allowable Revenue for the year is less than 60% of the Simple Average/Indexed Simple Average Revenue, the system will display “RS” in this column.
    • If RX is elected on the coverage and the Allowable Revenue/Indexed Average Revenue is the lowest in the tax history, the system will display “RX” in this column.
    • If both RS and RX are elected on the coverage and RS/RX both apply as described above, the system will display both values separated by a forward slash.
    • If neither RS or RX are elected on the coverage, this column will not display.

  5. Simple Average: For the Allowable Revenue and Allowable Expenses columns, this is the result of the sum of all Revenue for all years divided by 5. This is rounded to the nearest whole number.

  6. Indexed Average: For the Allowable Revenue and Allowable Expenses columns, this is the product of the Revenue Trend Factor multiplied by the Average Revenue. This value is rounded to the nearest whole dollar.

    7. To find the Revenue Trend Factor, the System divides the Allowable Revenue for each Tax Year by the Allowable Revenue from the previous Tax Year (rounded to 3 decimal places); then, it sums the values for each Tax Year and divides them by 4 (rounded to 3 decimal places); and finally, it multiplies that value by 4 (rounded to 3 decimal places).

  7. Expanded Average: For the Allowable Revenue and Allowable Expenses columns, when the Expanded Operations checkbox is marked, this is the Average Revenue and Average Expenses multiplied by the Adjustment Factor and then rounded to the nearest whole dollar. This is also referred to as the Expanded Operation Average. This value is read only.

  8. Historic Average: For the Allowable Revenue and Allowable Expenses columns, this is the higher of the Simple Average, Indexed Average, or Expanded Operation Average.

  9. If the Insured wants to opt out of indexing procedures, mark the Index Opt Out checkbox. The Indexed Average Revenue and Expenses will not be calculated.

  10. Schedule F on File?: If the Insured has provided a copy of the Schedule F Tax Form, mark this checkbox.

  11. Total Expected Revenue: The sum of the Expected Revenue from all commodity detail lines on the Commodities tab, rounded to the nearest whole dollar.

To support the uploading of attachments required for WFRP Micro Farm, these new Attachment Types were added:

• WFRP Application
• WFRP Expense and Revenue Worksheet
• WFRP History Report
• WFRP Farm Operation Report (Original, Revised, & Final)
• WFRP AP/AR Report
• WFRP Inventory Report
• WFRP Animal & Nursery Inventory
• WFRP Replant Worksheet
• WFRP Claim for Indemnity
• WFRP Combo Form
• WFRP Exp Value & Yld Wksht

The Micro Farm Final Report page is accessed via the Final FOR button on the Commodities tab to allow users to enter final production and revenue for Micro Farm policies so that it can transmitted to the RMA.

  1. Production Verified: From the dropdown, select "Y" or "N" to indicate whether the production has been verified. This will default to "N".

  2. Final Production: Type the Final Production for the commodity. The System will round to two decimal places. This is not required.

  3. Final Revenue: Type the Final Revenue for the commodity. The System will round this value to two decimal places. This is not required.

When the Micro Farm Final Report values are saved, they will be included in the P26 record of the Transmission.

 

Want to learn more?

"Create a Whole Farm Revenue Protection Policy"

"Add a Commodity to a Whole Farm Policy"

"Add Income to a Whole Farm Policy"