Multiple Peril Crop Insurance (MPCI)

Multiple Peril Crop Insurance (MPCI) is the general name given to crop coverage provided through the Federal Crop Insurance Corporation (FCIC).

Individual plans

Individual plans are based upon the insured’s production and for some coverage, there is protection against a loss of revenue caused by price increase or decrease.

MPCI Individual Plans

Individual plans are based upon the insured’s production and for some coverage, revenue history.

Actual Production History (APH)

The APH plan of insurance provides the producer protection against a loss of production due to nearly all unavoidable, natural occurring events. For most crops, that includes drought, excess moisture, cold and frost, wind, flood and unavoidable damage from insects and disease. This plan of insurance guarantees the producer a yield based on their production history, which is why it is called the APH plan.

The guarantee is calculated by multiplying their average yield by the level of coverage elected for the producer’s share of the crop. An indemnity may be due if the production (harvested and appraised) is less than the guaranteed amount.

The pricing for most crops insured under the APH plan of insurance is established by RMA.

Many of our perennial crops such as apples, peaches and grapes fall under the APH plan, as well as crops that do not have revenue coverage available. Some grain crops such as oats, rye, flax and buckwheat are also covered under the APH plan of insurance.

Yield Protection (YP)

The Yield Protection plan is very similar to the APH plan, but is only available on crops that are eligible for Revenue Protection. The Yield Protection plan of insurance provides protection against a loss of production.

It works the same as the APH plan but instead of using a price election established by RMA, the price is established according to the applicable board of trade/exchange as defined in the policy document called the Commodity Exchange Price Provisions (CEPP). The price that is used is called the Projected Price. The Projected Price is used to calculate the guarantee, premium and loss payments.

The guarantee is established by multiplying the average yield by the coverage level and by the Projected Price, and an indemnity may be due when the value of the production to count is less than the yield protection guarantee plan.

Revenue Protection (RP)

The Revenue Protection Plan provides protection against a loss of revenue caused by price increase or decrease, loss of production, or a combination of both. It is available for the same crops where YP coverage is available.

The RP plan uses the Commodity Exchange Price Provisions (CEPP) to establish the pricing, however it is a different from the YP plan since it uses two different price discovery periods. The projected price is determined in the same manner as YP and is used to calculate the premium, replant and Prevented Planting payments. The harvest price is released near harvest time. This price is used to calculate an indemnity.

The revenue protection guarantee is established by: Average Yield X Coverage Level X Insured’s Share Percentage X Projected Price.

An indemnity may be due when the calculated revenue (insured’s production X harvest price) is less than the revenue protection guarantee for the crop acreage.

Note: When the harvest price is released, if it is greater than the projected price, the revenue guarantee will be recalculated using the harvest price as well.

While the revenue guarantee is increased, the insured is not charged any additional premium for this increase. If the harvest price is less than the projected price, the policy guarantee remains at the projected price.

Revenue Protection with Harvest Price Exclusion (HP-HPE)

The Revenue Protection Plan with Harvest Exclusion Plan (RP-HPE) is similar to the Revenue Protection (RP) plan, however it provides coverage against loss of revenue caused by price decrease, low yields or a combination of both – the price increase is not covered because the guarantee is not adjusted up by the harvest price for this plan.

The projected price is used to determine the revenue guarantee, the premium and any replant or prevented planting payment. The harvest price is only used to value the production to count in a production or revenue loss. It is not used to recalculate the guarantee if there is an increase.

The producer does not receive the benefit of price movement with the RP-HPE plan.

Dollar Plans of Insurance

Dollar Plans of Insurance are available for some commodities. Dollar Plans of Insurance are usually insured in dollar per acre or some other measurement applicable to the crop. The maximum dollar amount per acre or other measurement is established and published by RMA. The insured chooses a percentage of the maximum dollar amount to establish the guarantee. A loss occurs when the dollar to count per acre falls below the dollar amount of insurance.

Actual Revenue History (ARH)

The Actual Revenue History is based upon the insured’s revenue history for the crop insured. The guarantee is calculated based upon the insured’s production and revenue history. A loss occurs when the revenue to count for the current year falls below the insured’s guaranteed revenue.

Area Plans

Area Plans insure against an area-wide usually county-wide loss of production on a crop. It is based on the concept that when an entire county’s crop yield is low, most producers in that county will also have low yields. National Agricultural Statistical Service (NASS) county data is used to set the expected and actual county yields.

Under an area plan, the insured chooses a percent of the expected county yield or revenue which is published by RMA in the actuarial documents. If the actual county yield or revenue falls below the expected county yield, a loss occurs regardless of the farm-specific production.

MPCI Area Plans

Area Plans insure against an area-wide usually county-wide loss of production on a crop. It is based on the concept that when an entire county’s crop yield is low, most producers in that county will also have low yields. National Agricultural Statistical Service (NASS) county data is used to set the expected and actual county yields.

Under an area plan, the insured chooses a percent of the expected county yield or revenue which is published by RMA in the actuarial documents. If the actual county yield or revenue falls below the expected county yield, a loss occurs regardless of the farm-specific production.

There are three Area Plans of Insurance:

  • Area Yield Protection Plan (AYP)
  • Area Revenue Protection (ARP)
  • Area Revenue with Harvest Price Exclusion (ARP-HPE)
Area Yield Protection Plan (AYP)

The AYP plan provides coverage based on the experience of the county, rather than an individual farm. A loss may occur if the final county yield falls below the insured’s expected (or trigger) yield. FCIC issues the final county yield in the calendar year following the insured crop year. Since this plan is based on a county yield and not a producer’s individual yield, it is possible for a producer to have a low yield on their farm and not receive any payment under this plan.

Area Revenue Protection (ARP)

The Area Revenue Protection Plan provides the yield protection of the Area Yield Protection Plan, but also provides against a loss of revenue due to production loss, price decline or a combination of both. ARP is similar to the RP plan as the initial guarantee is calculated using the projected price, but the revenue guarantee will increase if the harvest price is greater than the projected price. If the harvest price is lower than the projected price, the policy guarantee remains the same. A loss occurs when the Final County Revenue falls below the Expected County Revenue (or Trigger) Guarantee.

Area Revenue with Harvest Price Exclusion (ARP-HPE)

The ARP-HPE is similar to the ARP plan except that the guarantee is not adjusted up by the Harvest Price. The guarantee is always based on the projected price, but losses are calculated using the harvest price. This plan is very similar to the RPE-HPE plan except it is based on the experience of the county, rather than the individual producer.

Whole-Farm Revenue Protection (WFRP)

Whole-Farm Revenue Protection (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.

WFRP is available in all counties in all 50 states. You can buy WFRP alone or with other buy-up level Federal crop insurance policies. When you buy WFRP with another policy, the WFRP premium is reduced due to the coverage provided by the other policy. If you have other Federal crop insurance policies at catastrophic coverage levels, you do not quality for WFRP.

RMA has provided additional flexibility to producers by making the following changes to the policy, including:

  • Beginning Farmers and Ranchers – RMA makes it easier for more beginning farmers and ranchers to participate in the program by reducing the required records from five to three historical years, plus farming records from the past year. Additionally, any beginning farmer and rancher may qualify by using the former farm operator’s federal farm tax records if the beginning farmer or rancher assumes at least 90 percent of the farm operation.
  • Livestock Producers – RMA removed the previous cap that limited participants to those who received 35 percent or less of their income from livestock production. Producers will now be able to insure up to $1 million worth of animals and animal products.
  • Expanding Operations – RMA increased the cap on historical revenue for expanding operations to 35 percent from its previous 10 percent to better allow growing farms the opportunity to cover their growth in the insurance guarantee.
  • Late Fiscal Filer – RMA modified the definition of late fiscal filer to include producers with tax years that begin September through December and the early fiscal filer definition to include producers with tax years that being February through August.
  • New Sales Closing Date – RMA has added a fall sales closing date of November 20 for late fiscal filers.
  • Private Policies – RMA changed the method of handling indemnity amounts from private policies to include only the portion of the indemnity in excess of the WFRP deductible as revenue to count for WFRP.
Pasture, Rangeland, Forage (PRF) including Apiculture

Pasture, Rangeland, Forage (PRF) Pilot Insurance Program is designed to provide insurance coverage on your pasture, rangeland or forage acres. PRF is an area-based plan of insurance that uses a rainfall index to determine losses and trigger indemnities.

PRF is available in the 48 contiguous states with the exception of a few grids that cross international borders.

  • Annual Forage Pilot
    The Annual Forage pilot program provides coverage to acreage that is planted each year and used as feed and fodder by livestock. This pilot program utilizes the Rainfall Index to correlate to this annually planted acreage. The Annual Forage pilot program is available only in a select number of states and counties.
  • Apiculture Pilot
    The Apiculture Pilot Insurance Program provides a safety net for beekeepers’ primary income sources – honey, pollen collection, wax and breeding stock. The Apiculture Rainfall Index uses the same basic provisions as the Pasture, Rangeland, Forage pilot program.

Apiculture Pilot Insurance Program

The Apiculture Pilot Insurance Program provides a safety net for beekeeper’s primary income sources – honey, pollen collection, wax and breeding stock. The program offered by PRM and the Risk Management Agency uses rainfall or vegetation indices to estimate local rainfall or vegetative growth, allowing beekeepers to purchase insurance protection against production risks.

Specifically, the Rainfall Index Apiculture program uses proven technology to assess losses in plant production across diverse plant conditions and environments. The Rainfall Index uses the same basic provisions as the Pasture, Rangeland, Forage pilot program.

Margin Protection Plan (MPP)

Margin Protection provides coverage against an unexpected decrease in operating margin (revenue less input costs). Margin Protection is area-based, using county-level estimates of average revenue and input costs to establish the amount of coverage and indemnity payments. Because Margin Protection is area-based (average for a county), it may not reflect your individual experience.

Margin Protection takes into considerations changes in crop prices, reductions of yields and changes in the prices of inputs used to grow the crop.

Margin Protection is available in select counties for corn, rice, soybeans, and wheat in the states listed below:

  • Rice – Arkansas, California, Louisiana, Mississippi, Missouri and Texas
  • Corn and Soybeans – Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin
  • Wheat – Minnesota, Montana, North Dakota and South Dakota
Federal Livestock Program

The Livestock program includes two (2) separate plans:

  • Livestock Risk Protection (LRP)
  • Livestock Gross Margin

While both of these plans are under the Federal Livestock Program, they are different. Very simply stated, LGM insures against a loss of gross margin, or the value of the livestock / milk minus the cost of feed/feeders. LRP insures against a decline in price during the insurance period. 

Not all coverages or products may be available in all jurisdictions. The description of coverage in these pages is for informational purposes only. Actual coverages will vary based on the terms and conditions of the policy issued. The information described herein does not amend, or otherwise affect, the terms and conditions of any insurance policy issued by PRM or any of its subsidiaries.

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