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Crop Insurance Conundrum: Revenue Policy or GRIP?

Crop Insurance Conundrum: Revenue Policy or GRIP?

Deadline to nail down insurance policy coming very soon.

The countdown to March 15 is now at about two weeks. If you haven't already made your final decisions and enrolled in crop insurance for corn and soybeans for 2013, the window to get that taken care of is closing.

You have several decisions to make, and no one policy will be right for everyone. Doug Emery, regional marketing specialist with Diversified Services, Lafayette, who works with crop insurance year round, recently laid out some of the pros and cons between a revenue policy and GRIP.

Revenue policy covers that! This ear has a problem with aflatoxin. If your crop is discounted you could receive payment through Revenue crop insurance policies, assuming lab samples confirm it, but you aren't covered for grain quality through GRIP policies.

One of the biggest differences is that if you had a revenue-based policy in 2012 and had a loss, then you likely have already received all your money. If not it is likely headed your way soon. The only backup in getting paid on these policies was the workload adjustors had to sort through to get to each claimant because there were so many claims.

Since this policy is based on revenue, grain quality issues, such as aflatoxin are covered. That assumes that you notify the adjustor should you suspect you have the problem next fall, and allow him to take samples and ship them the lab for testing. If you have GRIP insurance, you have no coverage on grain quality losses. If your corn has aflatoxin or some other problem, you get what you can for it at the elevator. The insurance payment portion is totally separate from what actually happens to your crop on your farm.

GRIP policy holders pay the highest premium, but also stand to receive the most return. GRIP payouts are based on county average yield for the crop times a multiplying factor. This year that could result in some very big payouts.

One obvious disadvantage is that if you have a GRIP policy, you're waiting to see what the county average yield is. No payments can be made until the yield is issued. Those yields are determined by the National Ag Statistics Service, working through the Indiana Ag Statistics Service. If you received a survey asking about yields a couple months ago, odds are you participated in setting the yield. You can't request to be included. But if you don't return the form, you forfeit your chance to give input, and you are not replaced.

March 1 is the target date for county average yield data to be released. Once it's released, Emery says producers with GRIP policies can likely expect payment in April.

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