YIELD BASED COVERAGE
Multi-Peril Crop Insurance (MPCI) is the oldest and most common form of federal crop insurance. MPCI protects against crop yield losses by allowing participating producers to insure a certain percentage of historical crop production. A single policy protects crops against all natural perils including adverse weather, fire, insects, disease, wildlife, earthquake, volcanic eruption and failure of irrigation water due to unavoidable causes. It is delivered by private companies and reinsured by the federal government. MPCI is a very popular insurance coverage due to its flexibility in level and price.
Catastrophic crop insurance (CAT) - A component of the federal crop insurance program, originally authorized by the Federal Crop Insurance Reform Act of 1994 (P.L. 103- 354). CAT coverage compensates farmers for crop yield losses exceeding 50% of their average historical yield at a payment rate of 55% of the projected season average market price. CAT coverage requires that a farmer realize a yield loss of more than 50% and only makes payments on losses exceeding the 50% threshold. Producers pay no premium for CAT coverage, but except for cases of financial hardship must pay an administrative fee of $300 per crop. A producer has the ability to purchase additional insurance coverage (or buy-up coverage) beyond CAT coverage, but must pay a premium, partially subsidized by the government.
REVENUE INSURANCE PLANS
Crop Revenue Coverage (CRC) is a form of revenue insurance that protects a producer's revenue for an insurable crop whenever low prices, low yields, or a combination of both causes revenue to fall below a guaranteed level selected by the producer. It differs from other revenue insurance programs by allowing producers to use the higher of the planting price or the market price in determining a target level of revenue.
Revenue Assurance (RA) - Available for selected states and crops, this policy provides protection against revenue losses resulting from any combination of low market prices or low production yields. RA is available in certain states. Ask your Don or Casey about availability in your area.