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Multi-Peril Crop Insurance

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The Risk Management Agency (RMA) provides Multiple Peril Crop Insurance (MPCI) as a risk management tool available to agricultural producers. Producers should consider how a policy will work in conjunction with their other risk management strategies to insure their business is soundly protected. American West Insurance agents are here to work with producers in developing the best management protection plan for each individual business.

Various insurance plans provide coverage for specific commodities and are available for most commonly raised commodities.

Revenue Protection

Protects 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% (up to 85% in some areas). The projected price and the harvest price are 100% 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 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.

Revenue Protection with Harvest Price Exclusion

Protects producers in the same manner as Revenue Protection policies, except the amount of insurance protection is based on the projected price only (the amount of protection is not increased if the harvest price is greater than the projected 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 on the difference.

Yield Protection

Protects producers against yield losses due to natural causes. The level of coverage is determined using the same projected price as Revenue Protection policies. The producer may select the percent of the projected price he or she wants to insure between 55 and 100%. The producer selects the amount of average yield to insure from 50-75% (in some areas to 85%). If the harvested plus any appraised production is less than the yield insured, the producer is paid an indemnity based on the difference. Indemnities are calculated by multiplying this difference by the insured percentage of the price selected and by the insured share.

Actual Production History (APH)

Protects producers against yield losses in the same manner as Yield Protection policies, except the price is established annually by Risk Management Agency (RMA).

Catastrophic Risk Protection (CAT)

Pays 55% of the price of the commodity established by RMA on crop losses in excess of 50%. The premium on CAT coverage is paid by the Federal Government; however, producers must pay a $655 administrative fee for each crop insured in the county. Limited Resource/Beginning/Veteran Farmers & Ranchers may have this fee waived.

Area Risk Protection Insurance (ARPI)

Area Revenue Protection, Area Revenue Protection with Harvest Price Exclusion and Area Yield Protection. These are insurance plans that provide coverage based on the experience of the county.

Rainfall Index (RI)

Is based on weather data collect and maintained by the National Oceanic and Atmospheric Administrationís Climate Prediction Center. The index reflects how much precipitation is received relative to the long-term average for a specified area and timeframe. The program divides the country into six regions due to different weather patterns. The policy insures pastures, rangeland and forage (hay).

Livestock policies

Designed to insure against declining market prices of livestock and not any other peril. Coverage is determined using futures and options prices from the Chicago Mercantile Exchange Group. Price insurance is available for swine, cattle and milk. Producers decide the number of head (cwt of milk) to insure and the length of the coverage period. There are two types of plans available; Livestock Risk Protection, provides coverage against market price decline, if the ending priced is less than the producer determined beginning price an indemnity is due; and Livestock Gross Margin, provides coverage for the difference between the commodity and feeding costs. If the producer determined expected gross margin is greater than the actual gross margin, an indemnity is due.

Dairy Revenue Protection

Dairy Revenue Protection is an area-based revenue product designed to insure against unexpected declines in the quarterly revenue from milk sales relative to a guaranteed coverage level. Dairy producers may choose from two pricing options, Class Pricing and Component Pricing. At the end of the insurance period, if the actual milk revenue is below the final revenue guarantee, the producer may receive an indemnity payment for the difference between the final revenue guarantee and the actual milk revenue multiplied times the share and protection factor. Policies correspond to the quarters of the calendar year, and producers may purchase policies for up to 5 nearby quarters. Producers may cover 80% to 95% of their expected quarterly revenue.

Whole Farm Revenue Protection (WFRP)

Provides a risk management safety net for all commodities on the arm under one insurance policy. This insurance plan is tailored for any farm with up to $17 million in insured revenue, including farms with specialty or organic commodities (both crops and livestock), or those marketing to local, regional, farm-identity preserved, specialty, or direct markets.

Micro Farm Policy

This policy is offered through the Whole Farm Revenue Protection policy and was developed to meet the needs for small-scale farms, covering up to $350,000 of approved farm revenue including farms with specialty or organic commodities or those marketing to local, regional, specialty, or direct markets. Like WFRP, this policy provides coverage for the loss of revenue the producer expects to earn from commodities produced or purchased for resale. All coverage levels are available up to 85% and requires at least three years of consecutive tax records, including a lag year. Producers do not have to report expenses or individual commodities and it allows post-production costs to be counted as revenue, such as washing and packaging commodities or value-added products like jam.

Enhanced Coverage Option (ECO)

ECO is an endorsement that provides additional area-based coverage for a portion of the underlying crop insurance policy deductible (ARPI & CAT excluded). ECO offers producers a choice of 90 or 95 percent trigger levels. The ECO Endorsement begins to pay when county average yield or revenue falls below 95 percent (or 90 percent, if that is the trigger level you elect) of its expected level. ECO payments are determined only by county average revenue or yield and are not affected if the underlying policy receives an indemnity.

Supplemental Coverage Option (SCO)

SCO is an area based policy endorsement that can be purchased to supplement an underlying policy. It provides additional coverage for a portion of the underlying policy deductible. There are separate premium and administrative fees for SCO by crop/county. The SCO Endorsement begins to pay when county average revenue falls below 86 percent of its expected level. An indemnity is triggered when there is a county level loss in yield or revenue. Prevented planting and replanting provisions do not apply to SCO. Producers who elect to participate in Agricultural Risk Coverage, offered by Farm Service Agency (FSA), may not elect SCO on any of the same FSA farm numbers.

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal, and where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)

If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form, found online at http://www.ascr.usda.gov/complaint filing cust.html, or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter by mail to the U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, by fax (202) 690-7442 or email at program.intake@usda.gov.

Individuals who are deaf, hard of hearing or have speech disabilities and wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).

Persons with disabilities, who wish to file a program complaint, please see information above on how to contact the Department by mail directly or by email. If you require alternative means of communication for program information (e.g., Braille, large print, audiotape, etc.) please contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).