A crop insurance plan that provides coverage based on individual yield is known as what?

Prepare for the Missouri Crop Insurance Test. Enhance your knowledge with flashcards and multiple choice questions, providing hints and detailed explanations. Ace your exam with confidence!

The crop insurance plan that provides coverage based on individual yield is referred to as a Yield Protection Plan. This type of insurance is designed specifically to protect farmers by insuring their individual yield against losses resulting from adverse weather conditions, disease, pests, or other factors that may cause a reduction in crop yield.

In a Yield Protection Plan, the coverage is determined by the historical yield of the insured crop for that particular farm. The plan guarantees the farmer a certain level of revenue based on their individual production history, as opposed to broader area-based measures or revenue calculations that involve price fluctuations. This helps ensure that farmers can recover a portion of their lost income specifically due to yield shortfalls.

Area Yield Protection, on the other hand, covers losses based on average yields in a specific geographic area rather than individual farm yields. Revenue Protection Plan incorporates both yield and price, providing a safety net that ensures farmers are compensated even if market prices drop. Lastly, Whole Farm Revenue Protection covers the entire revenue of all commodities on a farm, ensuring broader coverage across multiple crops rather than focusing solely on yield for individual crops. Thus, the Yield Protection Plan is distinctly tailored to an individual farmer's yield losses, making it the correct answer.

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