Beginning Farmer and Rancher (BFR) and Veteran Farmer and Rancher (VFR)

June 2023

Beginning farmers and ranchers and veteran farmers and ranchers are fundamental and growing parts of the American and global agricultural marketplace. USDA continues to support beginning farmers and ranchers and veteran farmers and ranchers as they look to access capital and risk management tools, acquire land, and develop financially sustainable operations.

The primary goal of the Beginning Farmer and Rancher (BFR) program is to help beginning farmers and ranchers successfully enter into farming and ranching by providing support for the education, mentoring, and technical assistance projects that give beginning farmers and ranchers the knowledge, skills, and tools they need to make the best possible informed decisions for their operations.

The primary goal of the Veteran Farmer and Rancher (VFR) program is to ensure that veterans looking to return home and start a new career on a farm or ranch have the tools and opportunity needed to succeed.

The role of the Risk Management Agency (RMA) is to issue the policy and procedures needed to administer the BFR and VFR provisions that are unique to the Federal crop insurance program and to ensure that BFR and VFR benefits are made available to those the legislation is intended to assist. For additional information on the BFR and VFR resources visit the RMA website at www.rma.usda.gov/Topics/Beginning-or-Veteran-Farmers-and-Ranchers.

The benefits for BFR and VFR are the same. However, the qualifications for BFR and VFR are different. You may qualify for both BFR and VFR, but the programs are not interchangeable, and you may not receive BFR and VFR benefits at the same time. However, you may receive Veteran Farmer and Rancher benefits after receiving Beginning Farmer and Rancher benefits if you subsequently meet the Veteran Farmer and Rancher qualifications.

The BFR and VFR benefits are the same:

Exemption from paying the administrative fee for catastrophic (CAT) and additional coverage (buy up) level policies;
Additional 10 percentage points of premium subsidy for additional coverage policies (buy-up) that have premium subsidy;
Use of the previous producer’s production history, with permission, for the specific acreage transferred to you if you were previously involved in the decision making or physical activities on any farm that produced the crop or livestock; and
An increase in the substituted yield for Yield Adjustment, which allows a replacement of a low yield due to an insured cause of loss, from 60 to 80 percent of the applicable transitional yield (T-Yield) for the crop in the county.

A BFR is an individual who has not actively operated and managed a farm or ranch with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 5 crop years (10 crop years for WFRP). The 5 crop years (10 crop years for WFRP):

Includes an insurable interest as an individual or as a substantial beneficial interest holder (10 percent or more) in another person who has an insurable interest in any crop or livestock; and
Excludes crop years when the BFR was under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years) or on active duty in the U.S. military.

A VFR is an individual who has served on active duty in the United States Armed Forces, including Air Force, Army, Coast Guard, Marine Corps, Navy, and Space Force, and their reserve components, was discharged or released under conditions other than dishonorable, and qualifies under any of the following:

Has not operated a farm or ranch;
Has operated a farm or ranch for not more than 5 years; or
Is a veteran who has first obtained status as a veteran during the most recent 5-year period, even if that veteran has previously operated a farm or ranch for more than 5 years.

A person, other than an individual, may be eligible for veteran farmer or rancher benefits if all substantial beneficial interest holders qualify individually as a VFR. A spouse’s veteran status does not impact whether a person (comprised only of the veteran and their spouse) is considered a veteran farmer or rancher.

Business entities may receive BFR benefits only if all of the substantial beneficial interest holders of the business entity qualify as a BFR.

For example, a son moves home to take over the family farm and incorporates with his spouse and neither have previous farming experience. Their corporation would qualify for BFR benefits.

However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive BFR benefits. Although the son qualifies as a BFR, the father does not, so their corporation would not qualify for BFR benefits.

Business entities may receive VFR benefits only if all of the substantial beneficial interest holders of the business entity qualify as VFR.

For example, a veteran moves home to take over the family farm and incorporates with his/her spouse. Their corporation would qualify for VFR benefits even though the spouse is not a veteran. A spouse’s veteran status does not impact whether a person (comprised only of the veteran and their spouse) is considered a veteran farmer or rancher.

However, if a veteran moves home and forms a corporation with a parent, who has had an insurable interest in crops or livestock for more than 5 crop years, the corporation cannot receive VFR benefits. Although the veteran qualifies as a VFR, the parent does not so their corporation would not qualify for VFR benefits.

Irrevocable Trust do not have substantial beneficial interest holders (beneficiaries of Irrevocable Trusts are not considered substantial beneficial interest holders), therefore do not qualify as BFR or VFR.

To determine what is a crop year in which you have an insurable interest in crop or livestock in a crop year:

1. The crop year is when the individual had a financial interest in a crop or livestock and is based on the actual crop or livestock produced, for:

a. For insurable crops and livestock, the crop year is from the sales closing date to the end of insurance date;
b. For uninsurable crops the crop year is from the planting date to the harvest date; and
c. For uninsurable livestock the crop year is from July 1 to June 30.

To determine whether the crop year can be excluded the exclusion must:

1. Meet procedural criteria, such as military, education, and 18 years old or younger exclusions.
2. Meet the criteria in number 1 above and the exclusionary time overlaps the established crop year, the crop year may be excluded.

In determining BFR status, an insurable interest does not mean that the crop or livestock must be insurable, just that the individual must have an interest that is at financial risk in the crop or livestock. In the example provided, the individual has a financial risk that is considered an insurable interest for the purpose of determining BFR benefits.

A crop year, for BFR benefits purposes, for perennials is when the tree, vine, or bush produces a crop that is of such a value to be commonly harvested and marketed for the area. For insurable crops, it is when the crop has reached production minimums or insurable age and for uninsurable crops, as determined by local agricultural experts.

No, an interest in Conservation Reserve Program acreage is not considered an insurable interest in a crop or livestock because there is no crop or livestock for the acreage.

No, a crop or livestock crop year is counted if the person had a financial risk during the crop year.

Yes. Any allowable exclusions must overlap the crop year when you had an insurable interest in a crop or livestock.

The crop year begins with the sales closing date and ends with the end of insurance date. You attended a semester for 4 months, which overlapped the crop year, meeting the procedural criteria for exclusion. Since you met one of the exclusion criteria during the crop year, the crop year may be excluded.

In this example, the corn crop year begins on March 15 (the sales closing date) and ends December 15 (the end of insurance). The 4-month college exemption is met and the college time overlapped both the 2021 and 2022 crop years for corn. Therefore, both crop years may be excluded.

The livestock crop year is July 1, 2021, to June 30, 2022, and July 1, 2022, to June 30, 2023. An interest between December 2021 and January 2022 is 1 crop year. An interest between March 2022 and August 2022 is 2 crop years.

Yes. You met the 4-month college exclusion and the crop years are excluded. See the table below.

Commodity/Crop Year	Crop Year	College Exclusion	Overlap
Corn CY 2021	March 2021 to December 2021	September 2021 to June 2022	Yes
Corn CY 2022	March 2022 to December 2022	September 2021 to June 2022	Yes
Livestock CY 2022	June 2021 to June 2022	September 2021 to June 2022	Yes

Contact your crop insurance agent. You will need to complete a BFR/VFR Application and:

For BFR, provide acceptable documentation for any crop years you wish to exclude from consideration of BFR status for when you were under the age of 18, enrolled in post-secondary studies (not to exceed 5 crop years), or on active duty in the U.S. military.
For VFR, provide acceptable documentation for military records to substantiate active military service and discharge.

You will be notified if you qualify.

No, this is only applicable to BFR qualifications.

Yes, you can keep your BFR or VFR benefits as long as you remain eligible. Changing an insurance agent or Approved Insurance Provider does not impact your BFR or VFR eligibility.

When you change insurance agents or Approved Insurance Providers you do not need to complete a new BFR/VFR Application but you must provide your new insurance agent or insurance provider a copy of your previously completed BFR/VFR Application and notice of approval.

Consent from the other person whose production history is being used is required. The BFR or VFR is also required to have supporting records, upon request.

The years of history transferred do not count as crop years of insurable interest unless the BFR or VFR had an insurable interest in the crop, such as a substantial beneficial interest. However, if that was the case, it would likely fall under Crop Insurance Handbook, Paragraph 1509 or 1510, and the BFR or VFR would not transfer another person’s history as provided in Paragraph 1508.

Unlike the Transfer of actual production history data in the Crop Insurance Handbook, Paragraph 1507, the number of years of production history that may be transferred is not limited by the number of years the BFR or VFR was previously involved in any farming or ranching operation. However, a BFR or VFR can only use another person’s production history for a crop that the BFR or VFR was previously involved in. The involvement in the crop can be from any farming or ranching operation, not just the previous producer’s operation. If the BFR or VFR was involved with a crop, they can use the previous producer’s crop production records for new acreage, provided all of the requirements in Paragraph 1508 are met. Only the production history of the specific acreage being transferred may be transferred to the BFR or VFR.

Since the BFR was involved in the decision making on his father’s operation that grew corn, the BFR may use the neighbor’s corn production history on the 100 acres.

No, the VFR had no previous involvement in the decision making or physical activities in growing sunflowers, therefore they will not be able to use the neighbor’s production history for sunflowers.

Since the previous producer did not provide consent to the BFR, there is no other history applicable to transfer to the BFR. The BFR would establish their corn APH database on the 100 acres with T-Yields.

When you no longer qualify for BFR or VFR benefits, you will receive the same yield substitution as all other producers who are not BFRs or VFRs. You will also no longer be exempted from paying the administrative fees for your policies and you will no longer receive an additional 10 percentage points of premium subsidy.

Yes, if you qualify for VFR status based on first obtaining status as a veteran during the most recent 5-year period after receiving BFR benefits, even if you previously operated a farm or ranch for more than 5 years.

VFR status is dependent on how you qualified for VFR status. Once you elect and qualify for VFR status, it is continuous unless you cancel your application or either of the following conditions exist:

If you qualified for VFR status based on having operated a farm or ranch for not more than 5 years, then once you have operated a farm or ranch for 5 years, you are no longer entitled to VFR status.
If you qualified for VFR status based on first obtaining status as a veteran during the most recent 5-year period, then once 5 years has elapsed from first obtaining status as a veteran, you are no longer entitled to VFR status.

Once you have 5 crop years (10 crop years for WFRP) of insurable interest in a crop or livestock, including having a substantial beneficial interest (10 percent or more) in another person who has an insurable interest in a crop or livestock, you are no longer entitled to BFR status. Once you elect and qualify for BFR status, it is continuous until the earlier of:

You have had an insurable interest in a crop or livestock for more than 5 crop years (10 crop years for WFRP);
5 crop years of BFR benefits are exhausted; or
You cancel your BFR Application.

No, you can receive BFR benefits while attending college or university. However, these years will count towards the maximum 5 crop years (10 crop years for WFRP) that a producer can qualify for BFR benefits.

A business entity may receive BFR benefits if all of the substantial beneficial interest holders of the business entity qualify as a BFR. If you qualify as a BFR and you form a corporation, your corporation maybe eligible for BFR benefits. For example, a husband and wife form a corporation and neither spouse had previous farming experience or an insurable interest in a crop or livestock. The corporation would be eligible for BFR benefits. However, if a son moves home and forms a corporation with his father, who has had an insurable interest in crops or livestock for more than 5 crop years (10 crop years WFRP), the corporation cannot receive BFR benefits. Although the son may qualify as a BFR, the father does not and as such the corporation cannot receive BFR benefits.

Years of benefits are based on the VFR status you qualify for:

VFR status is based on not operating a farm for not more than 5 years.

Since you have never farmed, you would qualify for 5 years of VFR Benefits.