Multi-Peril Crop Insurance (MPCI) is a form of federal crop insurance that is reinsured by the federal government and offered by private companies. As the name implies, MPCI policies allow the producer to insure their crops against many naturally occurring perils such as adverse weather, fire, wildlife and failure of irrigation to name a few. Insurable crops and insurable counties are determined by the Risk Management Agency (RMA), which is a division of the USDA. There are different types of MPCI policies, with various endorsements available, to help growers protect their investment. As long as certain requirements are met, a large portion of the producer’s premium is subsidized by the RMA.
Crop Insurance Plans- The below list show the most commonly used plans. There are other plans that may not be listed that may be available for your farming operation. For more information please contact your agent. (The below descriptions in the outline do not substitute for the policy provisions. See the policy provisions for a complete description of available coverages and terms and conditions
Actual Production History (APH) - The APH plan of insurance 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. Like YP, the APH plan of insurance guarantees a yield based on the individual producer’s actual production history. Unlike YP, the available price elections are established by the Risk Management Agency. An indemnity is due when the value of the production to count is less than the liability.
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. Crops insured under the policy include Navel Oranges, Cherries and Strawberries. For more information, click here.
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. An indemnity is due when the value of the production to count is less than the yield protection guarantee.
Revenue Protection (RP) - RP provides protection against a loss of revenue caused by price increase or decrease, low yields or a combination of both. This coverage guarantees an amount based on the individual producer’s APH and the greater of the projected price or harvest price. Both the projected price and harvest price are established according to the crop’s applicable commodity board of trade/exchange as defined in the Commodity Exchange Price Provisions (CEPP). While the revenue protection guarantee may increase, the premium will not. The projected price is used to calculate the premium and replant payment or prevented planting payment. An indemnity is due when the calculated revenue (production to count x harvest price) is less than the revenue protection guarantee for the crop acreage. Crops covered under this plan include barley (includes malting type), canola/rapeseed, corn, cotton, grain sorghum, rice, soybeans, sunflowers, and wheat.
RP with the Harvest Price Exclusion (RP HPE) -RP HPE is similar to RP, however RP HPE coverage provides protection against loss of revenue caused by price decrease, low yields or a combination of both. Unlike RP, the revenue protection guarantee for RP HPE is based on the projected price only and it does not increase based on a harvest price. Crops covered under this plan include barley (includes malting type), canola/rapeseed, corn, cotton, grain sorghum, rice, soybeans, sunflowers, and wheat.
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. Crops insured under this plan include annual forage, apiculture, pasture, rangeland and forage.
Whole-Farms Revenue Protection Pilot Program (WFRP)-WFRP provides a risk management safety net for all commodities on the farm under one insurance policy. 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.)