Revenue Assurance | RA

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ABOUT RA

Revenue Assurance (RA) offers comprehensive protection through a dollar guarantee.  RA also provides prevented planting and replant coverage (available for wheat only in counties with both fall and spring final planting dates and counties with spring only final planting dates).  The Winter Wheat Coverage Endorsement is available in counties with both fall and spring planting dates.

RA COVERAGE

RA covers weather-related causes of loss, low prices, and certain other unavoidable causes of loss.

VALUE OF PRODUCTION

The value of production is the harvested production, plus any appraisals, multiplied by the fall harvest price.  The price at which the crop is sold does not affect the indemnity payment.

DOLLAR GUARANTEE

The RA dollar guarantee is the historical yield multiplied by the level of coverage (65-85% in increments of 5%), insured acreage, and the projected harvest price.  A "Fall Harvest Price Option," which provides increased protection if the fall harvest price is higher than the projected harvest price, is available.  The harvest price is limited to a 200$ increase over the base price.  There is no downward price limit.

LOSS PAYMENT

To determine a loss payment, subtract the value of production from the dollar guarantee and multiply by the ownership share.

UNITS

• A Basic Unit is all acreage of the crop in the county which the policyholder has 100% ownership or shares with the same person.

• Optional Units are divisions by sections or section equivalents (AR, LA, and MS units are only available by FSN), by irrigated or non-irrigated practices, and by acreage grown under an organic farming practice.

• Growers may also be eligible to choose a county crop enterprise unit or a whole farm unit which may qualify for a reduced premium rate.

BENEFITS OF RA

• RA fosters greater grower confidence to do pre-harvest crop sales to improve profits.

• It protects growers who need a specific amount of production to feed livestock.

• RA loss payments more closely track economic results.

• RA coverage may be viewed more favorably as loan collateral.

• An RA policy rewards the more business-like grower.

HOW IT WORKS (Corn Illustration)

                        Assumptions:

                                     Approved yield:  120 Bu./A.

                                     Level of Coverage:  75%

                                     Interest:  100%

                                     Acres:  100