The USDA Risk Management Agency (RMA) provides Multiple Peril Crop Insurance (MPCI) as a risk management tool available to agricultural producers. Producers
should consider how a policy will work in conjunction with their other risk management strategies to insure their business is soundly protected. Nodak Insurance
Company agents are here to work with producers in developing the best management protection plan for each individual business.
Various insurance plans provide coverage for specific commodities and are available for most commonly raised commodities.
Revenue Protection - Protects producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects
and disease, and revenue losses caused by a change in the harvest price from the projected price.
Revenue Protection with Harvest Price Exclusion - Protects producers in the same manner as Revenue Protection policies, except the amount of
insurance protection is based on the projected price only (the amount of protection is not increased if the harvest price is greater than the projected price).
Yield Protection - Protects producers against yield losses only due to natural causes such as drought, excessive moisture, hail, wind, frost,
insects, and disease. The level of coverage is determined using the same projected price as Revenue Protection policies.
Actual Production History (APH) - Protects producers against yield losses only in the same manner as Yield Protection policies, except the
price is established annually by Risk Management Agency (RMA).
Catastrophic Risk Protection (CAT) - Pays 55% of the price of the commodity established by RMA on crop losses in excess of 50%. The premium on CAT
coverage is paid by the Federal Government; however, producers must pay a $665 administrative fee for each crop insured in the county. Limited Resource/Beginning/Veteran
Farmers & Ranchers may have this fee waived. CAT coverage is not available on all types of policies.
The following insurance plans provide coverage based on the experience of the county.
Area Risk Protection Insurance (ARPI) - this insurance plan provides coverage for specific crops based on the experience of an entire area,
generally a county. The amount of insurance protection is based on the projected price, however can increase if the harvest price is greater than the projected price.
Area Risk Protection with Harvest Price Exclusion (ARPI-HPE) - Protects producers in the same manner as ARPI, except the amount of insurance protection
is based on the projected price only (the amount of protection is not increased if the harvest price is greater than the projected price).
Area Yield Protection (AYP) - this insurance plan provides yield coverage for specific crops based on the experience of an entire area.
Margin Protection (MP) - Protect producers against an unexpected decrease in operating margin (revenue less input costs), caused by reduced county
yields, reduced commodity prices, increased prices of certain inputs, or any combination of these perils. Because MP is area-based (average for a county), an individual
farm may have a decrease in its margin but not receive an indemnity or vice-versa. In this respect, MP behaves in the same manner as coverage under Area Risk Protection
Insurance (ARPI). MP has a Harvest Price Option. The data source for all county yields is NASS. Coverage is available for Wheat, Corn and Soybeans.
Dollar - Protect producers against declining value due to damage that causes a yield shortfall. The amount of insurance is based on the cost of growing
a crop in a specific area. A loss occurs when the annual crop value is less than the amount of insurance. This coverage is designed for Forage Seeding.
Rainfall Index (RI) - Area-based plan protects Pasture, Rangeland and Forage (PRF) for perennial pasture, rangeland, or forage used to feed livestock.
The RI plan also provides coverage for Apiculture. It provides producers a risk management tool to cover the precipitation needed to produce forage for their operation.
It's based on weather data collected and maintained by the National Oceanic and Atmospheric Administration's (NOAA) Climate Prediction Center.
Livestock policies - Designed to insure against declining market prices of livestock and not any other peril. Coverage is determined using futures
and options prices from the Chicago Mercantile Exchange Group. Price insurance is available for Swine, Cattle, Lambs and Milk. There are two types of plans available:
Livestock Risk Protection (LRP) provides coverage against market price decline, and Livestock Gross Margin (LGM), provides coverage for the difference between the
commodity and feeding costs.
Dairy Revenue Protection - Dairy Revenue Protection is an area-based revenue product designed to insure against unexpected declines in the quarterly
revenue from milk sales relative to a guaranteed coverage level. Dairy producers may choose from two pricing options, Class Pricing and Component Pricing. At the end of
the insurance period, if the actual milk revenue is below the final revenue guarantee, the producer may receive an indemnity payment for the difference between the final
revenue guarantee and the actual milk revenue multiplied times the share and protection factor. Policies correspond to the quarters of the calendar year, and producers
may purchase policies for up to 5 nearby quarters. Producers may cover 80% to 95% of their expected quarterly revenue.
Whole Farm Revenue Protection (WFRP) - provides coverage against the loss of revenue that you expect to earn, or will obtain from commodities you produce or purchase for resale during the
insurance period under one insurance policy. This insurance plan is tailored for any farm with up to $17 million in insured revenue, including farms with specialty
or organic commodities (both crops and livestock), or those marketing to local, regional, farm-identity preserved, specialty, or direct markets.
Micro Farm Policy - This policy is offered through the Whole Farm Revenue Protection policy and was developed to meet the needs for small-scale farms,
covering up to $350,000 of approved farm revenue including farms with specialty or organic commodities or those marketing to local, regional, specialty, or direct markets.
Like WFRP, this policy provides coverage for the loss of revenue the producer expects to earn from commodities produced or purchased for resale.
All coverage levels are available up to 85% and requires at least three years of consecutive tax records, including a lag year.
Producers do not have to report expenses or individual commodities and it allows post-production costs to be counted as revenue,
such as washing and packaging commodities or value-added products like jam.
Enhanced Coverage Option (ECO) - is an endorsement that provides additional area-based coverage for a portion of the
underlying crop insurance policy deductible (ARPI & CAT excluded). ECO offers producers a choice of 90 or 95 percent trigger levels.
The ECO Endorsement begins to pay when county average yield or revenue falls below 95 percent (or 90 percent, if that is the trigger level you elect)
of its expected level. ECO payments are determined only by county average revenue or yield and are not affected if the underlying policy receives an indemnity.
Supplemental Coverage Option (SCO) - is an area based policy endorsement that can be purchased to supplement an underlying policy.
It provides additional coverage for a portion of the underlying policy deductible. There are separate premium and administrative fees for SCO by crop/county.
The SCO Endorsement begins to pay when county average revenue falls below 86 percent of its expected level.
An indemnity is triggered when there is a county level loss in yield or revenue.
Prevented planting and replanting provisions do not apply to SCO. Producers who elect to participate in Agricultural Risk Coverage, offered by Farm Service Agency (FSA), may not elect SCO on any of the same FSA farm numbers.
