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Group Risk Protection GRP)

Group Risk Protection (GRP)

 

The GRP program is intended for growers who have a yield that corresponds with the county yield. It covers widespread losses of production rather than individual losses. 
The Group Risk Plan (GRP) of insurance is designed as a risk management tool to insure against widespread loss of production of the insured crop in a county. This is for general information purposes only. 

Alternative Plan

GRP is a dramatic departure from traditional approaches to crop insurance protection, with less paperwork and generally less cost than Multiple Peril Crop Insurance (MPCI). The policy was developed on the basis that when an entire county's crop yield is low, most farmers in that county will also have low yields. 

Coverage Levels
 

Producers must choose one coverage level for each crop and county combination. The grower selects the dollar amount of protection per acre and one of the five coverage levels (70, 75, 80, 85, or 90 percent) of the Federal Crop Insurance Corporation (FCIC) expected county yield. 

Expected County Yield

 
The expected county yield used for GRP is calculated using many years of county data from the National Agricultural Statistics Service (NASS) with an adjustment for the yield trend. 

Loss (Indemnity) Payments

 
Indemnities are paid when the NASS county yield for the county falls below the "trigger yield." The expected county yield is multiplied by the selected coverage level. Indemnity payments are made about six months after harvest of the crop. 

GRP Benefits

 
  • GRP offers catastrophic protection and may cost less than MPCI. 
  • GRP provides a simplified plan to manage risk because the only information a producer needs to provide is the number of acres planted by the acreage reporting date. 
  • Producers do not have to provide production history or evidence of loss because payments are made on losses based on the county expected yield. 

GRP Restrictions

 
  • Producers may not purchase GRP and MPCI coverage for the same crop and year. 
  • GRP does not provide prevented planting, late planting, or replant payments. 
  • It is possible for a producer to have a low yield on the acreage farmed and still not receive a payment under this plan. 
  • Lenders may not accept GRP as collateral. 

GRP Program Expansion

 
RMA is continuing to evaluate the feasibility and effectiveness of GRP, as well as monitoring producers' demand for it. RMA's objective is to expand into new areas and crops so that interested producers may obtain GRP.

 

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