CROP INSURANCE:
Crop insurance is a type of insurance coverage that is purchased by crop
farmers in order to insure against losses. Crop insurance is purchased by agricultural producers, including
farmers, ranchers, and others to protect themselves against either the loss of
their crops due to natural
disasters, such as hail, drought, and floods, or the loss of revenue due to declines
in the prices of agricultural
commodities.
Crop
insurance is purchased by agricultural
producers, including farmers, ranchers, and others to protect themselves
against either the loss of their crops
due to natural disasters, such as hail, drought, and floods, or the loss of
revenue due to declines in the prices of agricultural commodities.
TYPES OF CROP INSURANCE:
1. MPCI
MPCI stands for multiple peril crop
insurance. This is a type of crop insurance that is designed to cover the crops
against several different types of loss. This type of coverage will protect the
farmer against any weather-related losses, such as a tornado or a hail storm.
In addition, this policy covers things like low yields, late planting,
prevented planting and replanting costs.
2. APH
This term stands for actual
production history. This type of insurance is based on the production history
of a farm, over a certain number of years. In most cases, a policy will base
the actual production history on a period of somewhere between four and 10
years. The average production will be calculated over that time period, and
then a certain percentage of the yield will be paid if a loss occurs.
This type of policy provides
coverage for a wide variety of perils. For example, the farmer could file a
claim due to drought, wind damage, hail, frost, insects, disease or excessive
moisture. If the yield of a crop is less than the predetermined covered amount,
the farmer will receive a check for the difference between the two percentages.
This is the most common type of crop insurance that is available in the market
today. It has been used in the farming industry for many years.
3. GRP
GRP stands for group risk plan. This
is a type of crop insurance that is based on the yield of a group of farmers
from a particular county. This is not a type of policy that is based on an
individual farmers yield, like APH. With this type of policy, you could be paid
for an insurance settlement regardless of the actual yield of your farm. Your
farm could do fine, but if the average yield of the entire county decreased below
a certain amount, you could still receive a payment. This type of coverage
allows you to choose the yield level that you want to be covered against, when
calculated with the average of all of the farms in the county.
4. CRC
CRC is a term that stands for crop
revenue coverage. Instead of being based only on the yield of the farm, this
coverage is based on the total amount of revenue that is generated from a crop.
With this type of coverage, you will also get protection against drops in
prices for the crop instead of just protection against losses. This is a
comprehensive type of coverage that is designed to look at the bottom line
instead of only looking at how much you were able to harvest from a particular
farm for the year.
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