area risk
protection

Rabobank (through Rabo AgInsurance Services) provides you with access to this strategic, supplemental risk tool to shield you from vulnerabilities and secure your business even when times are tough. This county-based tool can help you maintain operations and avoid volatility.

Area Yield Protection

Area Yield Protection (AYP) protects your business against widespread loss of yield within your county.

Using multiple data sources for setting and determining county yields, AYP pays an indemnity if the final county average yield falls below the trigger level selected by the producer. AYP is subsidized by the Federal Crop Insurance Corporation (FCIC), and offers coverage levels ranging from 65% – 90% with maximum policy protection of 80% – 120% of the established price multiplied by the expected county yield. AYP protects yield risk only, not price risk.

Area Revenue Protection

Area Revenue Protection (ARP) is based on the same principle as Area Yield Protection (AYP), but ARP protects against loss of revenue caused by low prices, low yields or a combination of both. It protects your business against loss of revenue based on average per-acre revenue within your county. Using multiple data sources for setting and determining county yields, ARP pays an indemnity if the county average per-acre revenue falls below the trigger level selected by the producer.

ARP also includes the Harvest Price Option, which allows the producer to increase expected county revenue if the harvest price is higher than the projected price. This is important for protecting opportunity cost in volatile markets, providing upside protection as well as downside protection.

Key Differences Between AYP and ARP

Whether you choose AYP or ARP will depend on your business’ price exposure and market volatility. AYP provides protection for yield risk, while ARP provides price risk protection in addition to yield risk. This means ARP is more comprehensive, but also comes with a higher premium.

Who Should Consider Area Risk Protection Insurance?

Certain producers stand to benefit more from having area risk protection insurance than others. These include farmers in drought- or flood-prone regions, those with large-acreage operations, or those seeking lower-cost, index-based protection. Many producers who choose this protection also do so to supplement their existing individual crop coverage. This ensures they have farm revenue protection for widespread regional events as well as individual farm losses.

Talk to Rabobank Experts for Area Risk Protection Insurance

The Rabo AgInsurance Services team at Rabobank is here to help you understand your options and what works best for your specific operations. Our regional expertise means we can assist you in selecting trigger levels and coverage percentages so you have the most advantageous insurance coverage for your risk management. We also help you integrate this into a broader insurance and financing strategy as well as provide ongoing policy management.