Federal Crop Insurance

Policy Options

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Revenue Protection

Revenue Protection (RP) and Revenue Protection with Harvest Price Exclusion (RPHPE) are multi-peril crop insurance products that are based on the Commodity Exchange Price Provisions (CEPP) prices and protect against production loss, price decline or increase, or a combination of both. To determine the loss guarantee, RP will use the greater of the Projected or Harvest Price. RPHPE insures in the same way as RP, but uses only the Projected Price to determine the loss guarantee.

How Does It Work?

  • Both plans establish a minimum guarantee of revenue per acre.
  • ​The producer may select coverage with or without Harvest Price Exclusion.
  • ​To determine the Revenue Guarantee, RP will use the greater of the Projected Price or Harvest Price. RPHPE will use only the Projected Price.
  • ​For both plans, the indemnity payment is determined using the Harvest Price.
  • ​If Revenue to Count is less than final Revenue Guarantee, an indemnity is paid.

    What Are the Benefits?

  • Protects against revenue loss caused by low yeilds and/or low prices
  • RP offers "upside" Harvest Price Protection by valuing lost bushels at the Harvest Price
  • Flexible and efficient management tool for crop producers
  • Subsidized by the Federal Crop Insurance Corporation (FCIC)
  • Harvest price has no limit on the downward movement
  • Coverage on basic, optional, enterprise, and whole-farm units were available
  • Discounts for producers that insure multiple crops on whole-farm units
  • Premium amount is determined using the Projected Price. The premium will not increase even if the Harvest Price is higher than the Projected Price.
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Yield Protection

Yield Protection (YP) and Actual Production History (APH) are multi-peril crop insurance products that provide protection against losses in yield due to nearly all natural disasters. For most crops, that includes drought, excess moisture, cold and frost, wind, flood, and unavoidable damage from insects and disease. These products guarantee a yield based on an individual producer’s actual production history. If the Production to Count is less than the Yield Guarantee, an indemnity is paid.

How Does It Work?

  • Both plans establish a guarantee of bushels per acre.
  • YP Projected Price is determined by futures contracts, and APH price is established by the Federal Crop Insurance Corporation (FCIC).
  • ​Both plans pay an indemnity if the Production to Count falls below the Yield Guarantee.

    What Are the Benefits?

  • Offers a competitive premium
  • Subsidized by the FCIC
  • ​Protection against production loss
  • ​Based on a producer’s own production history
  • Provides coverage levels ranging from 50% to 85% of the APH
  • ​Provides coverage on basic and optional units
  • ​Enterprise unit coverage is available in some areas
  • ​60-100% coverage of the projected or FCIC price
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Area Revenue Protection

ARP is a county-based revenue insurance product that pays the producer in the event the Final County Revenue falls below the Trigger Revenue level selected by the producer. The Trigger Revenue is calculated using the higher of the Projected Price or Harvest Price. Individual farm revenues and yields are not considered, so a producer’s individual farm may experience reduced yield/revenue but not receive an indemnity. ARP offers “upside” Harvest Price Protection by valuing lost bushels at the Harvest Price.

ARP-HPE is a county-based revenue insurance product that insures in the same way as ARP, but uses only the Projected Price to determine the loss guarantee.

How Does It Work?

  • Both plans use county yields based on National Agriculture Statistics Service (NASS) data.
  • ​The Commodity Exchange Price Provisions (CEPP) are used to determine the Projected and Harvest Prices.
  • ​Both plans pay an indemnity if the Final County Revenue is lower than the selected Trigger Revenue.

    What Are the Benefits?

  • Both are a flexible program that allows the producer to choose between several coverage levels and amounts of protection
  • ​ARP allows the producer to increase Expected County Revenue if the Harvest Price is higher than the Projected Price. ARP-HPE guarantees the producer a set amount of county revenue.
  • Subsidized by Federal Crop Insurance Corporation (FCIC) and protects against widespread loss of yield in a county
  • Fits well with a full coverage crop hail policy, which provides additional coverages
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Area Yield Protection

Area Yield Protection (AYP) is designed as a risk management tool to insure against widespread loss of production of the insured crop in a county. AYP is primarily intended for use by those producers whose farm yields tend to follow the average County Yield. AYP is a county-based insurance product that pays the producer an indemnity in the event the Final County Yield falls below the Trigger Yield selected by the producer.

How Does It Work?

  • AYP uses county yields based on National Agriculture Statistics Service (NASS) data.
  • ​AYP pays an indemnity if the Final County Yield is below the Trigger Yield.

    What Are the Benefits?

  • Flexible program that allows the farmer to choose between several coverage levels and amounts of protection
  • Subsidized by Federal Crop Insurance Corporation (FCIC) and protects against widespread loss of yield in a county
  • Fits well with a full coverage crop hail policy, which provides additional coverages
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Actual Production History

Area Production History (APH) is the oldest insurance product listed on this comparison. The APH plan of insurance provides protection against a loss in yield due to nearly all natural disasters. For most crops, that includes drought, excess moisture, cold and frost, wind, flood and unavoidable damage from insects and disease. Like YP, the APH plan of insurance guarantees a yield based on the individual producer’s actual production history. Unlike YP, the available price elections are established by the Risk Management Agency. An indemnity is due when the value of the production to count is less than the liability. Of the small grain crops, only oats, rye, flax, and buckwheat remain covered under the APH plan of insurance for the 2015 crop year.

How Does It Work?

  • Establish a guarantee of bushels per acre
  • Price is established by the Federal Crop Insurance Corporation (FCIC)
  • ​Pays an indemnity if the Production to Count falls below the Yield Guarantee

    What Are the Benefits?

  • Offers a competitive premium
  • Subsidized by the FCIC
  • Protection against production loss
  • Based on a producer's own production history
  • Provides coverage levels ranging from 50% to 85% of the APH
  • Provides coverage on basic and optional units
  • Enterprise unit coverage is available in some areas
  • 60% to 100% coverage of the projected or FCIC price
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Pasture, Rangeland, Forage

The Risk Management Agency (RMA) Pasture, Rangeland, and Forage (PRF) pilot insurance program is designed to provide insurance coverage on your pasture, rangeland, or forage acres. This innovative pilot program is based on precipitation and the Rainfall Index. This program is designed to give you the ability to buy insurance protection for losses of forage produced for grazing or harvested for hay, which result in increased costs for feed, destocking, depopulating, or other actions.

PRF is available in the 48 contiguous states with the exception of a few grids that cross nternational borders. The Rainfall Index will replace the Vegetation Index beginning in the 2016 crop year.

RMA introduced a pricing methodology starting with the 2016 crop year that will better reflect your replacement costs for feed and the actual losses you experience. RMA is also offering an irrigated hay practice in some states that is designed to cover above normal irrigation expenses when normal precipitation shortfalls are observed. However, normal irrigation costs are not covered.

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Whole Farm

Whole-Farm Revenue Protection (WFRP) is a multi-peril crop insurance product that provides a safety net for all commodities on the farm under one insurance policy, including specialty and organic crops, allowing for more crop diversity on the farm.

WFRP provides protection against loss of revenue that you expect to earn or will obtain from commodities you produce or purchase for resale during the insurance period.

WFRP is designed to meet the needs of highly diverse farms that are growing a wide range of commodities, and for farms selling commodities to wholesale markets. The WFRP policy was specifically developed for farms that tend to sell to direct, local or regional, and farm-identity preserved markets and grow specialty crops and animals and animal products.

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Supplemental Coverage Option

The Supplemental Coverage Option (SCO) is a county-level revenue-based or yield-based optional endorsement that covers a portion of losses not covered by the same crop’s underlying crop insurance policy.

How Does It Work?

  • SCO follows the coverage of your underlying policy. If you choose Yield Protection, then SCO covers yield loss. If you choose Revenue Protection, then SCO covers revenue loss.
  • The amount of SCO coverage depends on the liability, coverage level, and approved yield for your underlying policy. SCO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue.
  • SCO payments are determined only by county average revenue or yield, and are not affected by whether you receive a payment from your underlying policy. So it is possible for you to experience an individual loss but to not receive an SCO payment, or vice-versa.
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Stacked Income Protection (STAX)

The Stacked Income Protection Plan (STAX) is a crop insurance product for upland cotton that provides coverage for a portion of the expected revenue for your area. Most often your area will be your county, but it may include other counties or even practices as necessary to obtain a credible amount of data to establish an expected yield and premium rate.

How Does It Work?

  • STAX provides coverage for up to 20 percent of the expected area revenue in increments of 5, 10, 15 or 20 percent.
  • It may be purchased on its own or as a companion to an MPCI policy.
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Margin Protection

Margin Protection is a crop insurance coverage option that provides producers with coverage against an unexpected decrease in their operating margin caused by:

  • Reduced county yields
  • Reduced commodity prices
  • Increased price of selected inputs
  • Any combination of the above

Margin Protection is area based, using county-level estimates of average revenue and input costs to establish the amount of coverage and indemnity payments.

 

How Does It Work?

  • MP provides coverage that is based on an expected margin per acre for each applicable crop, type, and practice.
  • MP is area-based coverage and may not necessarily reflect a producer’s individual experience.
  • The Harvest Price Option allows you to choose to include replacement cost coverage to the Margin Protection policy. Similar to many popular revenue-based policies, if the harvest price is greater than the projected price, the expected margin and the trigger margin are recalculated based on the higher harvest price.

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