What percentage of the established price does Catastrophic Coverage pay for crop losses over 50%?

Catastrophic Coverage under the Federal Crop Insurance program is designed to help mitigate significant losses due to natural disasters or adverse weather conditions affecting crop production. This coverage specifically pays producers 55% of the established price for the crop in question for any losses exceeding 50% of the crop yield.

This means that if a farmer incurs a loss that leads to a yield reduction of more than 50%, the insurance will compensate them at a rate of 55% for the market price of the crop based on the established price. This level of coverage is intended to provide a basic safety net rather than comprehensive financial protection, which is why it pays a lower percentage compared to other coverage options available under different insurance plans.

Understanding this structure is crucial for farmers in assessing their risk management strategies, as it informs them of the financial assistance they can expect in the event of severe crop loss.