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Revenue Insurance Program Development Long Term Revenue Annual Program In May of 2002, Watts and Associates proposed the development of the Long Term Revenue plan (LTR) as part of the feasibility assessment of new revenue plans. The objective was to develop a new revenue plan of insurance that provides a broadly applicable insurance product with a more constant revenue indemnity trigger through time. LTR protection is based on long term revenue expectations rather than the price movement within a single insurance year. The LTR program offers an alternative risk management tool for producers that more efficiently addresses their needs. Unlike the APH programs, the LTR product will allow producers to manage both production and price risk simultaneously by insuring an estimate of the region's long term revenue, adjusted to the historical production of the individual producer. In order to provide effective insurance coverage to the specific needs of diverse crop types, three unique applications of LTR have been developed. The applications are LTR Annual, LTR Regional, and LTR Perennial. Each of these applications offer a distinct but broadly applicable test of LTR concepts under the pilot. LTR Annual is a stand-alone policy where crop insurance protection is based on an insured Approved Indexed Producer Revenue (the average of Producer Annual Revenues divided by the Long Term Revenue Index). Long Term Revenue Index is a ratio calculated by dividing the Expected Regional Revenue by the Average Regional Revenue. Many potential fraud, waste, and abuse hazards will be eliminated because of a "proxy revenue" approach where Producer Annual Revenue is calculated by multiplying the insured producer's actual yield times a regional price. The LTR Annual program covers more traditional crops and is being used in the LTR Dry Pea and Lentil Pilot Program and the LTR Dry Bean Pilot Program (see maps). These two efforts are currently in the RMA review process.
Dry Pea and Lentil Pilot Area
CA Dry Bean Pilot Area 
MI Dry Bean Pilot Area 
ND Dry Bean Pilot Area 
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LTR Annual LTR Regional LTR Perennial  |