Potato Grower

36 POTATO GROWER | SEPTEMBER 2021 Diggin' In Diggin' In Contextualizing Whole-Farm Revenue Protection insurance purchase trends A Stronger Plan B INSURANCE | By Patrick Hatzenbuehler & Xiaoxue Du The fall is a natural time of year to take stock of things. In the farm com- munity, fall represents the end of the growing season for many row crops. Af- ter harvest, active farm activity tends to slow down a bit, and attention can shift toward assessment of how the growing season went and reflection on potential adjustments for the future. This time of year is also the start of the sales season for crop insurance for next year (first opportunities in November with sales extending into mid-March). As farmers reflect on the current season, it is natural to in- clude assessments of whether the risk management tools that are in place are meeting the needs of the farm. The goal of this article is to discuss a relatively new crop insurance prod- uct, Whole-Farm Revenue Protection (WFRP), in the context of potato pro- duction. WFRP is worthy of discussion among potato producers because the options for obtaining crop insurance via USDA county Risk Management Agency (RMA) are fewer than for other crops such as small grains. Specifically, potato producers have two main types of insurance—Catastrophic Risk Protec- tion and Actual Production History— while small grains have two additional options of Revenue Protection and Revenue Protection with Harvest Price Exclusion. Additionally, many small grains, pulses and other common rotation crops for potatoes are "covered commodities" under the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. Thus, addi- tional risk management tools such as WFRP should be welcome for consid- eration as part of a risk management strategy for potato producers. The WFRP program was established in the 2014 Farm Bill and is available in every county and all 50 states (US- DA-RMA 2019). WFRP is different from other insurance products because it was specifically designed to provide protection for diversified operations. WFRP provides payments if total farm revenue during the covered insurance period is below the guaranteed level due to unavoidable natural causes of loss. Highly diversified operations, or those with three or more commodities, benefit from the opportunity to obtain higher coverage levels of 80 or 85 per- cent. Those with only two commodities planted have a maximum coverage level of 75 percent. To date, WFRP has not been widely adopted, accounting for only 2 to 3 per- cent of total U.S. crop insurance liabil- ities in 2017-18. Washington State had the highest number of WRFP policies sold in 2017 and 2018. However, even in Washington, the WFRP share of total FCIC policies sold in 2020 was only 3.8 percent. These shares were only 1.6 percent in Idaho and Oregon. Despite these relatively low shares, indemnity payments in Washington were over $3.7 million and in Idaho were almost $1 million. Revenue Protection was the most popular policy in Washington and Oregon, while Yield Protection was the most common in Idaho. There are two main reasons WFRP has not yet been widely adopted. The [Diggin—UI Insurance] [1,103 words] Diggin' In / Insurance By Patrick Hatzenbuehler & Xiaoxue Du A Stronger Plan B Contextualizing Whole-Farm Revenue Protection insurance purchase trends PICS: Rexburg21_1572 Breding_1919 TABLE: Average and variation in statewide cash receipts (in $1,000) for potatoes and common rotation crops in Idaho, 2008 to 2019 Source: USDA Economic Research Service. CV = coefficient of variation, or the standard deviation (Std. Dev.) divided by the mean. It is a measure of variation that accounts for differences in scale. Potatoes Barley Dry Beans Hay Wheat Lentils Dry Peas Mustard Seed Mean 881,992 251,826 73,005 462,525 554,952 11,269 13,457 1,404 Std. Dev. 66,298 37,673 13,344 96,298 135,069 3,073 5,397 1,260 CV 0.08 0.15 0.18 0.21 0.24 0.27 0.40 0.90

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