Crop insurance deadline approaching

March 15 marks the last day to sign up for most federal crop insurance protection options. Last year’s drought makes for a solid argument as to why crop insurance is an important piece of any grower’s risk management plan. 

Source: http://www.iruhl.com/wp-content/uploads/2013/02/crops_insurance.jpg

 

Without crop insurance, a bad growing season due to weather can wipe out a great deal of an operation’s finances. If disaster strikes, you will be glad for your crop insurance protection. Among the many coverage options growers have to choose from, it is essential to know the differences between them. 

Insurance plans can provide different coverage depending on the option you select, can be based on the following:

•        Actual production history 
•        Actual revenue history 
•        Revenue protection 
•        Revenue protection with harvest price exclusion 
•       Yield protection

The USDA Risk Management Agency’s Actual Production History (APH) coverage is designed to protect growers against natural disasters, and growers select the amount of coverage based on average yield. 

Similar to APH, the Actual Revenue History (ARH) insurance plan is available to protect against losses from low yields and prices and is based on historical production history of that farm. 

Another option, the Revenue Protection Plan, provides coverage for yield losses from natural causes with prices calculated by the change in actual harvest prices compared to projected prices. The other Revenue Protection Plan with Harvest Price Exclusion, is designed to provide the same type of coverage but uses only the projected price and not the harvest price to calculate losses. 

Also, a yield protection plan is available that provides the same type of coverage as the APH plan, but the yield protection plan uses a projected price to calculate insurance coverage. 

To learn about these programs or the many others that are available, check out the USDA Risk Management Agency website.   

Before making the decision for crop insurance, it is important to talk with your insurance agent to find which option is best for your operation. 

According to the AgWeb.com article Farmers Tweak, Up CropInsurance Coverage, there is a clear trend heading into 2013. 

Tim Copeland, the vice president for Great American Insurance Group, said in the article, “We are seeing farmers take more coverage than in previous years.”  Copeland feels that some of the deciding factors for farmers include rising crop values and last year’s drought.