Multiple Peril Crop Insurance (MPCI)
CAT coverage is the minimum amount of coverage required to maintain eligibility for federal farm program benefits. CAT provides protection on losses that exceed 50% of APH at 55% of the crop’s expected market price, has more limitations than standard MPCI coverage, and is a basic unit coverage only.
MPCI guarantees the producer a selected amount of production based on the producer's historical yield results. MPCI covers loss of production due to drought, flood, fire, disease, pests, and adverse weather conditions.
Crop Revenue Coverage (CRC)
The most widely available revenue protection policy is CRC. This policy guarantees an amount of revenue (based on the individual producer's actual production history (APH) x commodity price) called the final guarantee. The coverage and exclusions of CRC are similar to those for the standard MPCI policy. This final 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) Group Risk Plan (GRP)
The coverage and exclusions of RA are similar to those for the standard MPCI policy. Where MPCI provides coverage for loss of production, 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. RA protects a producer's crop revenue when the crop revenue falls below the guaranteed revenue.
GRP coverage is based on the experience of the county rather than individual farms, so APH is not required for this program. GRP indemnified 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.
Group Risk Income Protection (GRIP)
Like GRP, GRIP coverage 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 calculatd 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 under GRIP. 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.
Crop Hail Coverage
Crop Hail protects against losses to crops from hail damage. Several options are available from dollar-per-acre coverage as well as Production Plans on certain crops.