Multiple-Peril Crop Insurance (MPCI)
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
- 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)
CAT provides the minimum level of coverage offered by FCIC, which meets the requirements for a person to qualify for certain other USDA program benefits (50 coverage level - 55% of market price).
Crop Revenue Coverage (CRC)
CRC provides protection against loss of income due to reductions in yield or changes in market prices, or a combination of the two.
CRC provides a revenue guarantee (based on your APH) that increases if harvest prices are high and provides income security if prices are low.
The allowance for the change in projected price from the beginning of the insurance period to the end, is the primary difference between CRC and other risk insurance plans. CRC also provides for unit coverage similar to the underlying MPCI policy, with the addition of an enterprise unit structure, which includes all insurable acreage for the crop in the county in which the insured has a share.
Revenue Assurance (RA)
- Revenue Assurance protects against loss of revenue caused by low prices or low yields or a combination of both (standard APH is used)
- Guarantee is based on the Projected (spring) Harvest Price, unless the Fall Harvest Option is elected
- Fall Harvest Price Option must be elected by Sales Closing Date
- Basic, Optional, Enterprise or Whole Farm units are available. Enterprise and Whole Farm must be elected by Sales Closing Date
- Same premium subsidy as MPCI & CRC
- Available for corn, soybeans, wheat, barley, sunflowers and canola
- Coverage levels: 65 to 75% for basic optional units, 65 to 85% for enterprise and whole farm units (check actuarials for availability)
- Replant payments are based on the Projected (spring) Harvest Price
Income Protection (IP)
IP insures a producer's loss of revenue as a result of low prices, low yields or a combination of the two. This coverage allows one enterprise unit per crop per county in which the insured has an interest and uses the APH program for yield setting. Price setting uses a projected price from the commodity futures market prior to planting to establish a revenue guarantee. An indemnity is due if the harvest price of the production to count falls below the revenue guarantee.
Group Risk Plan (GRP)
GRP is a county-based program with one unit per county. The policy holder’s guarantee is based on 30 years of NASS data for the 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 a specific county, the program works best for producers who consistently produce above the county average.
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)
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 producer’s 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
Livestock Risk Protection (LRP)
Livestock Risk Protection is designed to provide protection on fed cattle, feeder cattle, and swine against a price decline during the policy coverage period. LRP is priced and available for sale continuously throughout the year. Coverage is determined by multiplying the number of livestock to be marketed times the market weight times the coverage price times the insured share. Coverage levels range from 70-95% of the daily livestock prices.
Livestock Gross Margin (LGM)
Livestock Gross Margin for cattle provides insurance between the Gross Margin Guarantee and Actual Total Gross Margin based on a Producer's Target Marketing and futures prices prior to and during the insurance period. There are 12 insurance periods in each calendar year. Each insurance period runs 11 months and no cattle can be insured during the first month of the insurance period. Cattle insured in a yearling-finishing operation are assumed to weigh 750 lbs. when they enter the feedlot and to weigh 1250 lbs. at slaughter and to consume 57.5 bushels of corn. Cattle insured in a calf-finishing operation are assumed to weigh 550 lbs. when they enter the feedlot and weigh 1150 lbs. at slaughter and to consume 54.5 bushels of corn.
This is only a general description of coverages under the Crop Insurance Policy. It does not constitute a policy of insurance. Please consult your policy and endorsement for complete details of the policies including exclusions, any reductions or limitations, and the terms under which a policy may be continued in force.
The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).
To file a complaint of discrimination write to: USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.
American West Insurance Company is an equal opportunity provider and employer. American West Insurance Company prohibits discrimination on the basis of race, color, national origin, sex, religion, disability, political beliefs, and marital or familial status.
This website contains only a general description of coverage, and is not a policy contract. Coverage under an American West Insurance product is subject to terms, conditions and exclusions in the actual policy.
