Services : Crop Insurance Solutions

Group Risk Income Protection (GRIP)
GRIP is the newest revenue product to come along. GRIP is based on the experience of the county rather than individual farms, so APH 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 (or payment revenues) will be calculated prior to April 16 of the following crop year. GRIP will pay a loss when the county revenue 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 underGRIP. Beginning with the 2004 crop year, the GRIP Harvest Revenue Option (HRO) endorsement is available. This optional endorsement offers upside price protection by valuing lost bushels at the harvest price in addition to the coverage offered under GRIP.

Group Risk Plan (GRP)
Like GRIP, GRP coverage is based on the experience of the county rather than individual farms, so APH is not required for this program. GRPindemnifies the insured in the event the county average per-acre yield or payment yield falls below the insured’s trigger yield. The Federal Crop Insurance Corporation (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.

Crop Revenue Coverage (CRC)
The most widely available revenue protection policy is CRC. This policy guarantees an amount of revenue (based on the individual producers actual production history (APH) x commodity price) called the final guarantee. The coverage and exclusions of CRC are similar to those for the standard MPCIpolicy. This guarantee is based on the greater of the spring-time generated price (base price) or the harvest-time generated price (harvest price). While the guarantee may increase, the premium will not. Premium will be calculated using the base price. Since the protection of producer revenue is the primary objective of CRC, it contains provisions addressing both yield and price risks. CRC covers revenue losses due to a low price, low yield, or any combination of the two. A loss is due when the calculated revenue (production to count x harvest price) is less than the final guarantee for the crop acreage.

Revenue Assurance (RA)
The coverage and exclusions of RA are similar to those for the standard MPCI policy. However, MPCI provides coverage for loss of production, whereas RA provides coverage to protect against loss of revenue caused by low prices or low yields or a combination of both. RA has the Fall Harvest Price Option (FHPO) available. This Option uses the greater of the fall harvest price (harvest-time generated price) or the projected harvest price (spring-time generated price) to determine the per-acre revenue guarantee. So, with the Option, RA works like CRC, without the Option, it works like IP. RA protects a producers crop revenue when the crop revenue falls below the guaranteed revenue.

Multiple Peril Crop Insurance (MPCI)
MPCI is the oldest and most popular product to make this list. As the name implies, MPCI provides protection against a loss in yield due to nearly all natural disasters. For most crops, that includes drought, excess moisture, cold and frost, wind, flood and unavoidable damage from insects and disease.MPCI guarantees a yield based on the individual producers APH. If the production to count is less than the yield guarantee, the insured will be paid a loss.

Income Protection (IP)
IP is a revenue product that, based on the individual producer’s APH, protects against a loss of income when prices and/or yields fall.While IP looks a lot like CRC, it does not have the increasing price function of CRC. The guarantee and the premium will be calculated using the spring-time generated price (projected price). An indemnity is due when the revenue to count (production to count x harvest price) is less than the amount of protection.

The products and product topics summarized in this outline are not all-encompassing and do not substitute for the policy provisions. See the policy provisions and/or contact your company for a complete description of available coverages and their terms and conditions.