The 2014 Farm Bill may result in a number of new crop insurance products coming to market. One new type of product authorized for commodities, Margin Protection, (MP) became available in the 2016 crop year, for corn, rice, soybeans, and wheat in select states and counties. MP is available for rice in select counties in Arkansas, California, Louisiana, Mississippi, Missouri, and Texas. MP is available for corn and soybeans in all counties in Iowa. MP is available for wheat in select counties in Minnesota, Montana, North Dakota, and South Dakota. MP provides coverage against an unexpected decrease in a farmer’s operating margin (revenue less input costs). It is area-based, using county-level estimates of average revenue and input costs to establish the amount of coverage and indemnity payments.
Research and development of a rice margin insurance product is specifically required in the 2014 Farm Bill. New product priorities are placed on policies that increase participation by farmers of underserved agricultural commodities, including sweet sorghum, biomass sorghum, rice, peanuts, sugarcane, alfalfa, pennycress, dedicated energy crops, and specialty crops. Insurance products specifically identified for approval for sale, or research and development, include peanut revenue, alfalfa, whole farm risk management, and biomass sorghum and sweet sorghum for use in renewable energy and bio products.
The 2014 Farm Bill required the Risk Management Agency (RMA) to develop a product that addressed the needs of diversified farms. RMA was already developing a new product called Whole Farm Revenue Protection (WFRP) prior to the enactment of the farm bill and policies were available for sale beginning with the 2015 crop year.
This product may be particularly attractive to growers of specialty and organic crops because it enables them to cover all farm revenue under one policy. It also allows for other Federal crop insurance policies to be purchased covering individual commodities of significant importance to the operation.
Additionally, a new Peanut Revenue policy now provides farmers the ability to manage risk for both yield and revenue losses.