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Multi-Peril Crop Insurance
The Risk Management Agency(RMA) created the Common Crop Insurance Policy to combine the APH, CRC, RA, IP, & IIP plans into a single insurance plan. This new plan will simplify the insurance process, and provide a better understanding of the options available for producers. RMA also develops a single rating and pricing component, which will keep insurance coverage and cost consistent.
Producers will be able to elect yield protection, or revenue protection with harvest price exclusion for barley, canola, corn, cotton, grain sorghum, malting barley, rapeseed, rice, soybeans, sunflowers and wheat.
Both the Revenue and Yield Protection plans will use regional exchanges to derive the projected price used to establish the insurance guarantee and premium for the crop and the harvest price used to value production to count under the Revenue Protection plans. The price discovery period, release dates, board of trade’s utilized and additional pricing information will be contained in the Commodity Exchange Price Provisions(CEPP) which can be found on the RMA website.
Yield & Revenue Guarantees
Yield & Revenue Guarantees
- For Yield Protection - the yield protection guarantee will be determined by multiplying the production guarantee by the projection price. The projected price is also used to determine the premium, any replant payment or prevented planting payment, and to value the production to count. The harvest price is not used for yield protection.
- For Revenue Protection – the revenue protection guarantee will be determined by multiplying the production guarantee by the greater of the projected price or the harvest price(if the harvest price exclusion is in effect, the revenue protection guarantee will be determined by multiplying the production guarantee by the projected price). The projected price is used to determine the premium, and any replant payment or prevented planning payment. The harvest price is used to value the production to count.
Catastrophic Risk Protection (CAT)
Group Risk Plan (GRP)
Group Risk Plan (GRP)
GRP is a county-based program with one unit per county. Your guarantee is based on 30 years of NASS data for your county. You select a level of coverage from 70-90%, which becomes the trigger for any loss payment.
Since GRP is designed around the average yield for your county, the program works best for producers who consistently produce above the county average.
Group Risk Income Protection (GRIP)
Group Risk Income Protection (GRIP)
Advantages
- Doesn't require production records of past yields
- No field loss adjustment
- Harvest Revenue Option offers flexibility in coverage
Disadvantages
- Yield must be similar to county averages.
- Final payment is delayed until final yields are released.
- Individual loss is not covered if the county does not qualify for payment.
- No coverage for Prevented Planting, Replanting, or Late Planting.
Adjusted Gross Revenue-Lite(AGR-Lite)
Adjusted Gross Revenue-Lite(AGR-Lite)
AGR-Lite is a whole-farm revenue plan, providing protection against low revenue due to unavoidable natural disasters and market fluctuations that affect income during the insurance year. Most farm-raised crops, animals, and animal products are eligible for protection.
AGR-Lite can stand alone or be used in conjunction with other federal crop insurance plans except Adjusted Gross Revenue(AGR). When producers purchase both AGR-Lite and other federal crop insurance the AGR-Lite premium will be reduced. The AGR-Lite concept:
- Uses a producers five-year historical farm average revenue as reported on the IRS tax return(Schedule F or equivalent forms) and an annual farm report as a base to provide a level of guaranteed revenue for the insurance period.
- Provides insurance coverage for multiple agricultural commodities in one insurance product.
- Establishes revenue as a common denominator for the insurance of all agricultural commodities.
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