Multiple Peril Crop Insurance (MPCI)
Multiple Peril Crop Insurance provides protection against a loss in yield due to natural causes. For most crops, this includes drought, excess moisture, cold and frost, wind, flood and unavoidable damage from insects and plant disease.
Coverage levels are available from 50 to 75% (80 to 85% levels available in limited areas) in increments of 5% of the Actual Production History (APH) up to 100% of the price election.
MPCI Benefits
MPCI benefits include cash-flow protection, good loan collateral, added confidence when developing crop marketing plans, stability for long-term business plans and family security. Plus the Government shares on the premium costs.
Types of MPCI Policies:
The Actual Production History (APH) plan guarantees a yield based on individual producer's actual production history. The guarantee is calculated by taking the APH yield x selected level coverage x acres. (tobacco)
Yield Protection (YP)
*Production to Count - The production to count for the insured unit is the actual production, plus any yield appraisals, less any adjustments for excess moisture or poor quality (if applicable). Producers should notify their crop insurance agent or company immediately to get specific instructions on what to do if the crop is damaged or the producer plans to utilize production in such a way that harvested production cannot be determined.
The Yield Protection (YP) plan proctects against a production loss. YP also provides prevented planting and replant protection. Coverage is expressed as a production guarantee (approved yield times the coverage level).
*Yield Guarantee - The YP yield guarantee is the approved yield, multiplied by the selected level of coverage and the insured acreage.
*Benefits of YP-
- YP fosters greater grower confidence to do pre-harvest crops sales to improve profits.
- YP provides stability for long-term business plans.
- YP may be viewed more favorably as loan collateral.
- YP can act as a cash flow safety net.
Revenue Protection (RP)
Revenue protection offers comprehensive protection for corn, barley, grain sorghum, soybeans, and wheat through a dollar guarantee based on The Chicago Board of Trade's early futures price (base price). Revenue Protection also provides prevented planting and replant coverage. The perils covered are weather related causes of loss, certain other inavoidables perils, and price fluctuations.
*Dollar Guarantee - The RP dollar guarantee for the insured unit is the approved yield times the level of coverage, the insured acreage, the percent of share and the projected price. There is increased protection if the harvest price is higher than the projected price.
*Value of Production - To determine the value of production, multiply the harvested production, plus any appraisals, by the percent of share and the harvest price. The price at which the crop is sold is not used to calculate the loss payment. Protection is based on price and yield expectations by paying for losses below the guarantee at the higher of an early - season price or the harvest price.
*Benefits of RP
- RP protects growers who need a specific amount of production to feed livestock.
- RP loss payments more closely track economic results.
- RP may be viewed more favorably as loan collateral.
- RP rewards the more risk-conscious grower.
- RP fosters greater grower confidence to do pre - harvest crop sales to improve profits.