Global Ag offers many different types of crop insurance policies including Federal Multi-Peril Crop Insurance (MPCI) and private products. Please contact us or your crop insurance agent for additional details.
Multi-Peril Crop Insurance (MPCI) is the most prevalent type of coverage in the United States. It protects against losses of yields, revenue, or a combination of both. The policies that are available to growers are dependent on the state, county, and crop grown.
Actual Production History (APH)
APH policies insure against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. The insured selects the amount of average yield to insure; from 50-75 percent (in some areas to 85 percent). You also select the percent of the predicted price to insure; between 55 and 100 percent of the crop price established annually by RMA. 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 when crop insurance was purchased and by the insured share.
Actual Revenue History (ARH)
The ARH plan of insurance has many parallels to the APH plan of insurance, with the primary difference being that instead of insuring historical yields, the plan insures historical revenues. The policy is structured as an endorsement to the Common Crop Insurance Policy Basic Provisions. It restates many of the APH yield procedures to reflect a revenue product. Each crop insured under ARH has unique crop provisions. Like current revenue coverage plans, the ARH pilot program protects growers against losses from low yields, low prices, low quality, or any combination of these events.
Dollar Plan (DO)
DO provide protection against declining value due to damage that causes a yield shortfall. The amount of insurance is based on the cost of growing a crop in a specific area. A loss occurs when the annual crop value is less than the amount of insurance. The maximum dollar amount of insurance is stated on the actuarial document. The insured may select a percent of the maximum dollar amount equal to CAT (catastrophic level of coverage), or purchase additional coverage levels.
Rainfall Index (RI)
RI is based on weather data collected and maintained by the National Oceanic and Atmospheric Administration’s 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, with pilots available in select counties.
Revenue Protection (RP)
RP policies insure 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 percent (in some areas to 85 percent). The projected price and the harvest price are 100 percent 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 price 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.
Yield Protection (YP)
YP policies insure producers in the same manner as APH polices, except a projected price is used to determine insurance coverage. The projected price is determined in accordance with the Commodity Exchange Price Provisions and is based on daily settlement prices for certain futures contracts. The producer selects the percent of the projected price he or she wants to insure, between 55 and 100 percent.
Whole Farm Revenue Protection (WFRP)
WFRP provides a risk management safety net for all commodities on the farm under one insurance policy and is available in all counties nationwide. This insurance plan is tailored for any farm with up to $8.5 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.
Global Ag offers a broad portfolio of Named Peril, private crop insurance policies available as a supplement to MPCI policies. Named Peril policies generally cover a single peril like hail, freeze, or rain depending on the commodity. They are often purchased by growers to fill gaps in coverage or when the MPCI liability amounts are too low to cover the insured’s exposure.
Global Ag’s portfolio includes:
- Cherry Rain
- Grower Citrus Freeze
- Packer Citrus Freeze
- Raisin Reconditioning and Extra Expense
- Tomato Rain
We are committed to expanding the options available to growers and helping clients address exposures in their current coverage. Do you have an idea for a new policy? Or can you make an existing policy better? Let us know, we’d like to talk with you about it.
As growers diversify their operations to include acreage outside of the United States, many are faced with risks and exposures that can’t be addressed through standard crop insurance policies. Adequately addressing those needs requires technical expertise combined with a global reach; it requires Global Ag. Give our office a call to learn more.