Revenue Assurance - RA
GENERAL SUMMARY
What is it? What are its Benefits?
• This program provides comprehensive protection by establishing a dollar guarantee based on the board of trade's early futures price (projected harvest price).
• Coverage levels are available from 65-85% in increments of 5%.
• The perils covered are weather related causes of loss, certain other unavoidable perils, and price fluctuations.
• RA provides prevented planting protection.
Dollar Guarantee
The dollar guarantee for the insurance unit is the approved yield (APH), times level of coverage, times the insured acreage, times the ownership share, times the projected price. A "Fall Harvest Price Option" is available which provides increased protection if the near harvest price (fall harvest price) is higher than the projected harvest price.
Value of Production
To determine the value of production, multiply the harvested production, plus any appraisals, by the ownership share and the fall harvest price. The price at which the crop is sold is not used to calculate the loss payment.
Loss Payment
To calculate a payable loss, subtract the value of production from the dollar guarantee and multiply by the ownership share.
Units
The basic insurance unit is all the acreage of the crop in the county in which the policyholder has 100% ownership or shares with the same person. Most basic insurance units can be further divided into optional units. Optional units may be divided by sections or section equivalents (in areas without sections or section equivalents, separate farm serial numbers (FSN) may be used), by irrigated or dryland practices, and by acreage grown under an organic farming practice. In AR, LA, and MS, units are only available by FSN. To qualify, a producer must have individual records for each unit and the planting pattern between the units must have a discernible break. Growers can also choose a county crop enterprise unit or a whole farm unit at a reduced premium rate.
How It Works (corn illustration 2)
Benefits of RA
• Fosters greater grower confidence to do pre-harvest crop sales to improve profits
