STALLINGS CROP INSURANCE CORPORATION

Let Us Help You with WHIP and Block Grants

The 2017 Wildfires and Hurricanes Indemnity Program (2017 WHIP) is providing disaster payments to agricultural producers to offset losses from hurricanes and wildfires during 2017.  The funds – up to $2.36 billion – are available through the new program. 2017 was a historic year for natural disasters, and Congress appropriated more than $3 billion in disaster relief through the Bipartisan Budget Act of 2018, which includes this new program.

USDA will hold a sign-up for the new program beginning no later than July 16, 2018. More information on how to apply will be available in the coming weeks.

About the Program

The 2017 WHIP covers losses of producers impacted by hurricanes and wildfires during 2017.

Wildfire Recovery: FSA will determine eligibility for wildfire losses on an individual basis, factoring in the level of insurance coverage purchased by the producer. Wildfire recovery will also include mudslides and heavy smoke.

Hurricane Recovery: 2017 WHIP for hurricane losses and related conditions, such as excessive rain and flooding, will be available for eligible farms in counties that received a qualifying Presidential Emergency Disaster Declaration or Secretarial Disaster designation. This includes counties or parishes in at least nine states and territories –  Alabama, Florida, Georgia, Louisiana, Mississippi, Puerto Rico, South Carolina, Texas and the Virgin Islands. Other crops, trees, bushes or vines outside of these identified counties may be eligible if the producer provides documentation the loss was caused by a 2017 hurricane.

Citrus Growers in Florida: 2017 WHIP is directly reimbursing producers for crop production losses in 2018. In addition to WHIP, USDA is providing a grant to Florida, which is reimbursing citrus producers for the cost of buying and planting replacement trees, including resetting and grove rehabilitation, and for repair of damages to irrigation systems. This grant is also providing assistance for losses of citrus production expected during the 2019 and 2020 crop years.

Additional Program Information

Losses of Crops, Trees, Bushes and Vines: The program covers both the loss of the crop, tree,  and losses of trees, bushes and vines.

Payments: USDA is determining compensation by a producer’s individual losses rather than an average of losses in the area. Producers are subject to a $125,000 payment limitation, meaning a producer can’t receive more than $125,000 for losses. But a producer can receive a higher payment if three-fourths or more of their income is derived from farming or another agricultural-based business. Producers who derived 75 percent of their income in tax years 2013, 2014 and 2015 will be subject to a $900,000 payment limitation.

Risk Management Requirement: Both insured and uninsured producers are eligible to apply for WHIP. But all producers receiving 2017 WHIP payments will be required to purchase risk management coverage, either crop insurance at the 60 percent coverage level or Noninsured Crop Disaster Assistance Program (NAP) coverage if crop insurance is not available. The program requires producers to have coverage for the next two crop years.

Acreage Reporting Requirements: Producers are required to file acreage reports and report production for the applicable crop years.

WHIP Payments

USDA is calculating WHIP payments based on the expected value of the lost crop, the value of the crop harvested, insurance coverage, and insurance payments received. USDA is using this formula:

Payment = Expected Value of the Crop x WHIP Factor* – Value of Crop Harvested – Insurance Indemnity

*The WHIP factor ranges from 65 percent to 95 percent.  Producers who did not insure their crops in 2017 will receive 65 percent of the expected value of the crop. Insured producers, or producers who had NAP, will receive between 70 percent and 95 percent of expected value; those purchasing the highest levels of coverage will receive 95 percent coverage.

Payments for Puerto Rico Producers: USDA is calculating payments differently in Puerto Rico because of damages to offices and the agriculture industry. USDA is calculating the loss using the insurance or NCT price multiplied by the expected yield times the producers crop acres.

Sign-up Information

We’re working quickly to implement this program. Sign-up for the new program will begin no later than July 16, 2018.

In the meantime, we recommend producers who have not participated in a USDA program to contact their local USDA service center to establish farm records. To establish a farm tract number, be sure to bring:

  • Proof of identity: driver’s license, Social Security number/card;
  • Copy of recorder deed, survey plat, rental, or lease agreement of the land. You do not have to own property to participate in FSA programs;
  • Entities: corporation, estate, or trust documents.

Once signup begins, producers will be asked to provide verifiable and reliable production records by crop, type, practice, intended use, and acres. Producers with this information on file do not need to provide again.

Producers should bring production records for the last five years. If a producer is unable to provide production records, USDA is calculating the yield based on 65 percent of county expected yield.

BLOCK GRANT

In addition to WHIP, the Florida Division of Emergency Management (DEM) will manage a block grant program that contains $340 million for citrus growers.  There are no AGI or payment limits with the block grant program, other than the Congressional mandate that citrus financial recovery cannot exceed 85% of estimated losses for all insured growers, and 65% losses for uninsured growers.

However, anyone who wants to take part in the block grant relief program must first submit a WHIP application. To prevent duplication, the WHIP data will be used to determine eligibility for the block grant program.

Florida Department of Agriculture and Consumer Services (FDACS) and the industry are still working out the details of the block grant program but we know it will have three buckets of funds:

  1. Compensation for the replanting or rehabilitating trees damaged during Irma, including the cost of new trees and irrigation systems, fertilization and other grove caretaking costs.
  2. Compensate growers for lost production.
  3. Two year crop insurance subsidy if you commit to buying 60/100 coverage over the next four years. The programs require growers to buy tree and crop insurance for at least two years. A four year commitment gets the subsidy.

We understand there is a lot of complexity to WHIP and accompanying paperwork. But we believe this is a fair program that will provide the necessary funding to get growers back on their feet in addition to building a foundation for the industry to expand in the coming decade. More details to follow.

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