Coverages
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About GRP
Group Risk Plan (GRP) provides a dollar amount of protection per acre. A loss payment triggers when the county average yield in a given year falls below the trend adjusted average yield by a greater percentage than the policyholder’s selected deductible. GRP does not provide prevented planting, late planting, or replant payments.
Levels of Coverage
The grower selects the dollar amount of protection per acre and the percentage of the county yield (70% to 90% for most crops) at which they want to insure. GRP Catastrophic (CAT) coverage is available at 65% of the expected county yield and 45% of the maximum amount of protection per acre.
Units
The coverage unit is all acreage of the crop in the county.
Benefits
- GRP is a simplified program that is easy to understand.
- GRP provides payment based on performance of a crop in a county as a whole.
- GRP is more appealing than a CBOT crop yield contract because:
- GRP triggers based on county, rather than state, average yield.
- The grower’s transaction cost is lower because of the government cost share.
Loss Payment
A loss is payable when the county average yield for the crop in the current year is less than the percentage of coverage selected by the grower at the time of application.
How It Works for Corn
| Assumptions | ||
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Amount of coverage selected |
.....$300/A. |
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Percent of county yield selected |
.....90% |
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Expected county yield |
.....120 Bu./A. |
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| Trigger yield | .....108 Bu./A. |
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Payment yield |
.....90 Bu./A. |
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| Loss Payment | ||
| Payment calculation factor |
.....16.7% |
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| (108 Bu. minus 90 Bu. divided by 108 Bu.) | ||
| 16.7% loss × $300 = |
.....$50 Loss payment per acre |
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Availability
Crop |
State |
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| Corn | IA, IL, IN, MI, MN, MO, NE, OH, SD, WI | Availability varies by county. See actuarials for more information. |
| Cotton | AR, GA, LA, MO, MS, NC, TN, TX |
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Forage Production |
IL, MN, PA, WI |
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Grain Sorghum |
KS, TX |
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| Oysters | LA | |
Soybeans |
IA, IL, IN, MI, MN, MO, NE, OH, SD, WI |
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Sugarcane |
LA |
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Wheat |
AR, CO, IL, IN, KS, KY, MD, MI, MN, MO, MS, MT, NC, ND, NE, OH, OK, SD, TN, TX |
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