The USDA and Risk Management Agency (RMA) continue to move forward with implementing the crop insurance requirements for beginning farmers outlined in the 2014 Farm Bill. The RMA has filed its interim final rule which provide the following:
- New farmers are exempt from paying the $300 administrative fee for catastrophic crop insurance policies;
- Premium support rates will increase 10% for a new farmers’ first five years of farming;
- Beginning farmers receive a greater yield adjustment when yields fall below the 60% of the applicable transitional yield; and
- Allowing the use of yield history from any previous involvement in a farm or ranch operation, including decision making or physical involvement in the production of the crop or livestock.
Crop insurance is a well-honed risk management strategy and one that beginning farmers in particular should seriously consider. Given the RMA has now increased incentives for beginning farmers to include crop insurance in their risk management plan, now is a good time to seriously explore the options.