USDA’s Risk Management Agency has published the Area Risk Protection Insurance final rule. Farmers who prefer to take out crop insurance based on the yield and revenue in their area rather than on the individual farm will have the option beginning with winter wheat this fall. RMA says the new rule provides clarity, simplicity, transparency and the reduction of duplication for producers and agents. ARPI is a combination of two previous area policies – the Group Risk Plan and the Group Risk Income Protection Plan. The Group Risk Plan covers against loss of yield due to a county level production loss and the Group Risk Income Protection Plan covers against loss of revenue due to a county level production loss, price decline or combination of both. Since ARPI combines the two into one insurance policy – GRP and GRIP insurance plans will not be available for the 2014 crop year. RMA Administrator Brandon Willis says the change provides a simpler and streamlined option for those producers who use area plans to protect themselves from price declines and natural disasters. He says it will also improve the collection of data – which will help RMA offer producers more risk management options in the future.
According to RMA – producers will be able to choose from one of three area insurance plans under ARPI – Area Revenue Protection, Area Revenue Protection with the Harvest Price Exclusion or Area Yield Protection all under one umbrella policy with specific provisions for each crop. An RMA release states ARPI includes crop provisions for barley, corn, cotton, forage, grain sorghum, peanuts, soybeans and wheat. The first major contract change date is June 30 for wheat. Current GRP and GRIP policyholders do not have to reapply as their policy will roll to the similar ARPI plan of insurance. ARPI uses the same Commodity Exchange Price Provisions that the Common Crop Policy uses – providing consistent prices for both individual and area-based insurance plans; and includes provisions that will require production reporting by a production reporting date at the conclusion of the current insurance year to assist in more accurately and efficiently operating the area-based program.
The initial rule on ARPI was issued in 2011. RMA received 300 comments and believes the issues raised have been addressed.
Source NAFB News Service