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Revenue Insurance Program Development Long Term Revenue Regional Program In order to provide effective insurance coverage that addresses 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. Maple syrup is the only crop under the Revenue contract that would require the LTR Regional product. LTR Regional is a product designed for crops that cannot utilize individual loss adjustment. LTR Regional provides a relatively consistent revenue guarantee through time, based on the price and production of the region in which the producer operates. Because of the long history used in determining the guarantee, the producer's LTR insurance is very stable. The LTR Regional application is based on state level expected revenue. For example, the producer insures against revenue losses in the entire state, so if the revenue for the entire state is down, the producer will receive a payment. The theory behind this concept is that the producer's revenue and the state's revenue display a strong positive correlation. Put simply, the policy assumes when the region is up, the producer is up and when the region is down, the producer is down. The LTR Regional Maple Syrup Pilot Program is under development because no insurance policies for maple syrup have successfully been offered in the past. While most crop insurance programs are based on acreage, a maple syrup product would need to be based on tap numbers because the number of trees per acre and tree size (which influences the number of taps per tree) vary. Producers know how many taps they will place each season and will enroll for that expected number. The number of taps will be self-certified and compared with state reported tap numbers. This product is scheduled to be available for the 2006 crop year. The program will be piloted in Maine, New Hampshire, New York, and Vermont (see map).
Maple Syrup Pilot Area
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LTR Annual LTR Regional LTR Perennial  |