Area Revenue Plan
Why Choose the Area Revenue Plan?
The Area Revenue Plan is based on countywide data. The difference is that the Area Revenue Plan protects you from a potential loss in the revenue resulting from a significant reduction in yields or prices of a specific crop in your county. The Area Revenue Plan is based on an established “trigger revenue” also calculated from countywide statistics. If you purchase an Area Revenue Plan and the average revenue for your county falls below the trigger revenue, you may be eligible for a loss payment. Purchasing the Area Revenue Plan Harvest Price Option allows the ability to increase the revenue guarantee if prices increase in the fall.
Protection against widespread loss of revenues from the insured crop in a county due to low prices and/or low yields.
Developed on the basis that when an entire county’s crop revenues are low, most producers in that county also will have reduced revenues.
You may suffer a personal loss in revenue on your farm, but if the countywide revenues are not below the trigger, no indemnity is due. Your revenue could be higher than the countywide average, but if countywide revenues are below the trigger level, you still collect an indemnity.
Generally less costly than MPC! coverage or individual-based revenue plans.
No paperwork, loss documentation or adjustment is needed. Settlements are made based upon the county average yields or calculated revenue.
Pays when the NASS-calculated county revenues fall below the trigger revenue for the covered crop. Indemnity payments are made about five months after harvest.
Area Revenue Plan Example
Situation: County revenue falls below trigger revenue.
Purchased Coverage: $406/Acre
Acres Farmed: 200 Acres
Policy Protected: Coverage ($406) x Acres Farmed (200) = $81,200
Expected County Revenue: $271/Acre
Coverage Level: 85%
Trigger Revenue Expected County Revenue $271/Acre) x
Coverage Level (85%) = $230/Acre
Final County Revenue: $225/ Acre
Triggering the Claim: Trigger Revenue ($230/Acre) –
Final County Revenue ($225/Acre) = $5/Acre
Indemnity: Revenue Shortfall ($5/Acre) / Trigger Revenue
($230/ Acre) x Policy Protection ($81,200) =
1 Not available on all crop policies.