Crop Insurance Plans

Farmers may select from various types of policies. Standard Multiple Peril Crop Insurance (MPCI) policies are available for most insured crops. Other plans may not be available for some insured crops in some areas. In addition, some of the policies listed are not available nationwide - they are being tested in pilot programs and are only available in selected states and counties.

Yield-based (APH) Insurance Coverage

Multiple Peril Crop Insurance (MPCI)
These policies insure producers against losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. The farmer selects the amount of average yield he or she wishes to insure; from 50 to 75 percent (in some areas to 85 percent). The farmer also selects the percent of the predicted price he or she wants to insure; between 55 and 100 percent of the crop price established annually by RMA. If the harvest is less than the yield insured, the farmer is paid an indemnity based on the difference. Indemnities are calculated by multiplying this difference by the insured percentage of the established price selected when crop insurance was purchased.

Group Risk Plan (GRP)
These policies use a county index as the basis for determining a loss. When the county yield for the insured crop, as determined by the National Agricultural Statistics Service (NASS), falls below the trigger level chosen by the farmer, an indemnity is paid. Payments are not based on the individual farmer's loss records. Yield levels are available for up to 90 percent of the expected county yield. GRP protection involves less paperwork and costs less than the farm-level coverage described above. However, individual crop losses may not be covered if the county yield does not suffer a similar level of loss. This type of insurance is most often selected by farmers whose crop losses typically follow the county pattern.

Dollar Plan
The dollar plan provides protection against declining value due to damage that causes a yield shortfall. The amount of insurance is based on the cost of growing a crop in a specific area. A loss occurs when the annual value of the crop is less than the amount of insurance. The maximum dollar amount of insurance is stated on the actuarial document. The insured may select a percent of the maximum dollar amount equal to CAT (catastrophic level of coverage), limited, or additional coverage levels. The dollar plan is available for several crops, including fresh market tomatoes, strawberries, and cherries (on a pilot program basis in limited areas only).

Revenue Insurance Plans

Group Revenue Insurance Policy (GRIP)
GRIP makes indemnity payments only when the average county revenue for the insured crop falls below the revenue chosen by the farmer.

Adjusted Gross Revenue (AGR)
insures the revenue of the entire farm rather than an individual crop by guaranteeing a percentage of average gross farm revenue, including a small amount of livestock revenue. The plan uses information from a producer's Schedule F tax forms to calculate the policy revenue guarantee.

Crop Revenue Coverage (CRC)
provides revenue protection based on price and yield expectations by paying for losses below the guarantee at the higher of an early-season price or the harvest price.

Income Protection (IP)
protects producers against reductions in gross income when either a crop's price or yield declines from early-season expectations. To determine coverage, see the policy provisions.

Revenue Assurance (RA)
provides dollar-denominated coverage by the producer selecting a dollar amount of target revenue from a range defined by 65-75 percent of expected revenue. To determine coverage, see the policy provisions.

Policy Endorsements

Catastrophic Coverage (CAT)
pays 55 percent of the established price of the commodity 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 for each crop insured in each county. Limited-resource farmers may have this fee waived. CAT coverage is not available on all types of policies.