The Risk Management Agency (RMA) has announced a streamlined and simpler approach to buying area risk protection insurance by publishing the Area Risk Protection Insurance (ARPI) final rule effective for the 2014 and succeeding crop years.
ARPI combines the Group Risk Plan (GRP), which covers against loss of yield due to a county level production loss, and the Group Risk Income Protection Plan (GRIP), which covers against loss of revenue due to a county level production loss, price decline or combination of both, into one insurance policy.
With the publication of this final rule, the GRP and GRIP insurance plans will be replaced by the new area plans beginning with the 2014 crop year.
Under ARPI, producers will be able to choose from one of three area insurance plans: 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.
Previously, under GRP and GRIP, insurance providers would issue two separate policies, so a policyholder might have had multiple copies of essentially the same information.
ARPI includes crop provisions for barley, corn, cotton, forage, grain sorghum, peanuts, soybeans and wheat.
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.
ARPI 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 products.