Federal crop insurance — protect your bottom line
Federal Crop Comparison Chart
- Actual Production History (APH) -
The APH plan of insurance provides protection against a loss in yield. For most crops, that includes drought, excess moisture, cold and frost, wind, flood, and unavoidable damage from insects and disease. This plan guarantees a yield based on the individual producer’s actual production history. The available price elections are established by the Federal Crop Insurance Corporation (FCIC). An indemnity is due when the value of the production to count is less than the liability.
- Yield Protection (YP) -
YP provides protection against a loss in yield. For most crops, that includes adverse weather, fire, insects, plant disease, wildlife, earthquake, volcanic eruption and failure of the irrigation water supply due to a naturally occurring event. Like the APH plan of insurance, YP guarantees a production yield based on the individual producer’s APH. Unlike the APH plan, a price for YP is established according to the crop’s applicable commodity board of trade/exchange as defined in the Commodity Exchange Price Provisions (CEPP). The projected price is used to determine the yield protection guarantee, premium, any replant payment or prevented planting payment, and to value the production to count. An indemnity is due when the value of the production to count is less than the yield protection guarantee.
- Revenue Protection (RP) -
RP provides protection against a loss of revenue caused by price increase or decrease, low yields or a combination of both (for corn silage and rapeseed, protection is only provided for production losses). This coverage guarantees an amount based on the individual producer’s APH and the greater of the projected price or harvest price. Both the projected price and harvest price are established according to the crop’s applicable commodity board of trade/exchange as defined in the Commodity Exchange Price Provisions (CEPP). While the revenue protection guarantee may increase, the premium will not. The projected price is used to calculate the premium and replant payment or prevented planting payment. An indemnity is due when the calculated revenue (production to count x harvest price) is less than the revenue protection guarantee for the crop acreage.
- RP with Harvest Price Exclusion (RP HPE) -
RP HPE is similar to RP, however RP HPE coverage provides protection against loss of revenue caused by price decrease, low yields or a combination of both. Unlike RP, the revenue protection guarantee for RP HPE is based on the projected price only and does not increase based on a harvest price.
- Group Risk Plan (GRP) -
GRP coverage is based on the experience of the county rather than individual farms, so while maintaining the insured’s actual production history is encouraged, it is not required for this program. GRP indemnifies the insured in the event the payment yield falls below the insured’s trigger yield. The FCIC will issue the payment yield in the calendar year following the crop year insured. Since this plan is based on county yields and not individual yields, the insured may have a low yield on their farm and not receive payment under GRP.
- Group Risk Income Protection (GRIP) -
Like GRP, GRIP is based on the experience of the county rather than individual farms, so while maintaining the insured’s actual production history is encouraged, it is not required for this program. A GRIP policy includes coverage against potential loss of revenue resulting from a significant reduction in the county yield or commodity price of a specific crop. When the county yield estimates are released, the county revenues will be calculated. An indemnity is due under GRIP when the county revenue published by FCIC is less than the trigger revenue. Since this plan is based on county revenue and not individual revenue, the insured may have a loss in revenue on their farm and not receive payment under GRIP. The Harvest Revenue Option (HRO) Endorsement is available for GRIP (see below).
- GRIP with Harvest Revenue Option (GRIP HRO) -
GRIP HRO is GRIP but with an added Harvest Revenue Option. For additional premium, this option offers “upside” harvest price protection by valuing lost bushels at the harvest price in addition to the coverage offered under GRIP. GRIP HRO will pay a loss when the county revenue is less than the HRO trigger revenue, which is calculated using the higher of the projected price or harvest price.
To learn more about the affordable crop hail insurance programs available through AgMax or to find a crop insurance agent in your area, contact us at 1-800-370-3357 or via e-mail at firstname.lastname@example.org.