The U.S. Department of Agriculture’s (USDA) Federal Crop Insurance Corporation Board of Directors has approved the Trend-Adjusted Actual Production History (APH) Yield Option insurance plan for corn and soybeans to be available starting with the 2012 crop year for select states and counties.
The Illinois Corn Marketing Board developed the plan along with financial consulting company integrated Financial Analytics and Research (iFAR).
The plan allows policyholders with qualifying APH databases in eligible counties to elect to have their APH yield adjusted based on their county’s historical yield trend. APH yields are used to determine crop insurance coverage guarantees.
The Trend-Adjusted APH Yield Option is designed to improve accuracy of the estimate of future yields, and allows accurate coverage elections to be made against expected future crop production.
To be eligible for the Yield Option, the policyholder’s APH database must include at least one actual yield determined in one of the four most recent crop years. If the producer’s APH database has fewer than four actual yields within the previous 12 years, the adjustment is prorated.
Additional restrictions on APH databases exist to ensure appropriate use of the option, and to encourage accurate and complete yield reporting through time.
The option will be available for corn and soybeans on all coverage levels of additional coverage protection for APH-based plans of crop insurance products in specific counties in Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Minnesota, North Dakota, Nebraska, Ohio, South Dakota, and Wisconsin.
USDA’s Risk Management Agency (RMA) is working with the private submitters to finalize and release all program details of the Yield Option on its website this fall, in time for the 2012 crop year.
RMA helps producers manage their business risks through effective, market-based risk solutions. RMA’s mission is to promote, support, and regulate sound risk management solutions to preserve and strengthen the economic stability of America’s agricultural producers. As part of this mission, RMA operates and manages the FCIC.