| Alternative Plan |
| GRP is a dramatic departure from traditional approaches to crop
insurance protection, with less paperwork and generally less cost than Multiple Peril
Crop Insurance (MPCI). The policy was developed on the basis that when an entire
county's crop yield is low, most farmers in that county will also have low yields.
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| Coverage Levels |
| Producers must choose one coverage level for each crop and county
combination. The grower selects the dollar amount of protection per acre and one of the
five coverage levels (70, 75, 80, 85, or 90 percent) of the Federal Crop Insurance
Corporation expected county yield.
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| Expected County Yield |
| The expected county yield used for GRP is calculated using many
years of county data from the National Agricultural Statistics Service (NASS) with an
adjustment for the yield trend.
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| Loss (Indemnity) Payments |
| Indemnities are paid when the NASS county yield for the county
falls below the "trigger yield". The expected county yield is multiplied by the
selected coverage level. Indemnity payments are made about six months after harvest
of the crop.
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| GRP Benefits |
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GRP offers catastrophic protection and may cost less than MPCI. |
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GRP provides a simplified plan to manage risk because the only
information a producer needs to provide is the number of acres planted by the acreage
reporting date. |
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Producers do not have to provide production history or evidence of
loss because payments are made on losses based on the county expected yield. |
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| GRP Restrictions |
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Producers may not purchase GRP and MPCI coverage for the same crop and year. |
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GRP does not provide prevented planting, late planting, or replant payment. |
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It is possible for a producer to have a low yield on the acreage farmed and still
not receive a payment under this plan. |
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Good experience discounts earned with MPCI do not apply. |
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Lenders may not accept GRP as collateral. |
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| GRP Program Expansion |
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RMA is continuing to evaluate the feasibility and effectiveness of GRP, as well as monitoring
producers' demand for it. RMA's objective is to expand into new areas and crops so that
interested producers may obtain GRP.
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| Information provided by the US Department of Agriculture. |
