MULTIPLE PERIL
CROP INSURANCE

Multiple Peril Crop Insurance is designed to protect farmers for loss of production (bushels, pounds, tons) below a predetermined point know as the GUARANTEE.

APH - ACTUAL PRODUCTION HISTORY (INSURANCE YIELD)

The development of the APH yield is the most important component of Multiple Peril Crop Insurance. Insured and agent need to take the necessary steps to develop an APH yield to provide the insured with a sound insurance program.

Insured may certify acres, production and yields to establish an APH yield. In the event of an APH audit, the insured will be required to submit hard copy records to substantiate the yields certified.

The following types of "hard copy" records are acceptable:  farm management records, CFSA records, FCIC or MPCI company records, elevator or warehouse receipts and farm stored production.

Sample Problem - Yield Calculation

T-Yield Wheat 30 bu.
T-Yield Corn 112 bu.
T-Yield Soybeans 32 bu.

MULTIPLE PERIL CROP INSURANCE
Catastrophic "CAT" Protection

• Coverage/Guarantee— The protection is 50% of the grower's APH yield at 55% of the market or established price election.
  
  • Example:
    • assume 40 bu APH and $3/bu.
    • 40 bu/acre APH
    • x 50 % coverage level
    • x $1.65/ bu. ($3.00 x 55%)
    • $33/acre (protection liability)
    • Growers can also elect an area yield loss plan instead of individual coverage on a crop basis, where the Group Risk Plan (GRP) is available.
      
      
• Insurance Unit—All insurable acreage of crop in the county in which the grower has an ownership must be enrolled in the program. Units can be established to separate each acreage of the crop in which a different person has an ownership share.
  
  
• Perils Covered—Protection is provided against drought and other natural disasters, including prevented and late planting.
  
  
• Premium—The premium will be paid in full by the government.
  
  
• Administrative Fee—An administrative fee of $100 per crop per county must be paid by the grower at the time premium for additional coverage would be due.

Buy-Up Protection
Most "catastrophic" protection can be upgraded in numerous ways, including:

• Price Election—The price election can be upgraded up to 100% of the established or market price.
  
  
• Levels of Coverage—The levels of coverage can be increased from 50% to 75% (in 5% increments) of the proven APH yield (80% and 85% coverage levels are available in limited pilot areas).
  
  
• The Group Risk Plan (GRP) may be purchased in lieu of individual loss protection, where available. GRP may provide coverage up to 90% of the county or area yield. Losses are paid only when the county level yield falls below the coverage level selected.
  Prevented planting, late planting and replanting coverage options are available for many crops with "Buy-Up" Protection.
  
  
• Units—Units can be established to separate each acreage of the crop in which a different person has an ownership share.
  
  These units can be further divided if:

1. Acreage of the crop that would otherwise be one unit is located in separate sections (FSA farm serial numbers in areas without sections) or for irrigated and non-irrigated acreage and,

2. Separate yield records are provided to prove the yield for each such subdivision and the planting pattern between the units has a discernible break. The premium is reduced if additional insurance unit division is declined.

• Premiums—The premium rates for the buy-up coverage are shown on the actuarial table(s) for the insurable crop(s). The government requires a $30 administrative fee per crop by county.
  Some land or crop practices may not be eligible for buy-up coverage protection.
  
  
  For more information, see USDA Risk Managment Agency.