Crop Insurance

With high input costs and the unpredictability of each growing season growers should have crop insurance.

Common Crop Insurance Programs

Revenue Protection

OUR MOST POPULAR PLAN OF INSURANCE! Revenue Protection policies insure producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease, and revenue losses caused by a change in the harvest price from the projected price. The producer selects the amount of average yield he or she wishes to insure; from 50-75 percent (in some areas to 85 percent). The projected price and the harvest price are 100 percent of the amounts determined in accordance with the Commodity Exchange Price Provisions and are based on daily settlement prices for certain futures contracts. The amount of insurance protection is based on the greater of the projected price or the harvest price. If the harvested plus any appraised production multiplied by the harvest price is less than the amount of insurance protection, the producer is paid an indemnity based on the difference.

Area Risk Protection Insurance (ARPI)

Area Risk Protection Insurance (ARPI) is an insurance plan that provides coverage based on the experience of an entire area, generally a county. ARPI replaces the Group Risk Plan (GRP) and the Group Risk Income Protection Plan (GRIP).

Catastrophic Risk Protection Endorsement (CAT Coverage)

CAT is a cheap plan of insurance which provides very little coverage. Catastrophic Risk Protection Endorsement (CAT Coverage) pays 55 percent of the price of the commodity established by RMA on crop losses in excess of 50 percent. The premium on CAT coverage is paid by the Federal Government; however, producers must pay a $300 administrative fee (as of the 2008 Farm Bill) for each crop insured in each county. Limited-resource producers may have this fee waived. CAT coverage is not available on all types of policies.

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