Group Risk Income Protection expanded - New revenue insurance tied to county averages

NATIONAL CROP INSURANCE SERVICES

8900 Indian Creek Parkway, Suite 600

Overland Park , KS 66210

FOR IMMEDIATE RELEASE
January 25, 2006

Data in this article was provided by USDA’s Risk Management Agency. Your state is one of the 39 states where farmers are affected by this change. For more information contact Jan Eliassen at 410-778-0120 or Laurie Langstraat at 913-685-2767.

Group Risk Income Protection expanded

New revenue insurance tied to county averages

OVERLAND PARK, Kan.---The Risk Management Agency (RMA) has approved Group Risk Income Protection (GRIP) wherever Group Risk Protection (GRP) programs were in place. This expansion of the federally subsidized crop insurance program affects 39 states and six major crops: corn, soybeans, cotton, peanuts, grain sorghum, and wheat.

For most producers that means they have only until the upcoming sign-up deadlines should they want to change to GRIP. That means February 28 in most southern states and March 15 across the central and northern states.

GRIP is a simplified, area-based revenue insurance that pays the insured in the event the county average per-acre revenue falls below the insured’s “trigger revenue.”

GRIP is similar to Group Risk Plan policies in that participation is driven by the relationship of individual yield to county expected yield, except that price is added into the equation to place the focus on revenue.

Coverage levels

Producers must choose one coverage level for each crop in each county where they produce that crop. The grower selects the dollar amount of protection per acre and one of five coverage levels (70, 75, 80, or 90 percent) of the expected county revenue (as determined by the Federal Crop Insurance Corporation).

Rather than selecting a production guarantee, the producer selects a dollar value of coverage per acre. Producers may select any dollar amount of protection between 60 and 100 percent of the maximum dollar amount of protection shown on the county actuarial documents.

A producer should evaluate each crop insurance product individually to determine what product works best for his or her situation. A GRIP indemnity payment will occur if the county revenue is less than the producer’s trigger revenue based on the selected coverage level. An individual loss will not necessarily trigger an indemnity payment.

For more information contact a crop insurance agent well before your sign-up deadline.

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