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Revenue Insurance Program Development There has been considerable interest in the development of a true revenue insurance plan. Revenue Assurance (RA) plans and Crop Revenue Coverage (CRC) plans managed to attract 60% of policies earning premiums and 70% of net-insured acres for eligible crops in 2003. However, these are not true revenue plans in that they operate on the basis of price change between planting and harvest. Under contract to RMA, Watts and Associates researched the development of a revenue plan that would meet the needs of the producers. The resulting report noted the difficulty of offering revenue coverage plans when there is a lack of futures contract markets for a commodity. As a result of our findings, we suggested an alternate approach be tested, and further recommended that certain crops and regions be emphasized in this test. Based on our recommendations, RMA issued a contract for pilot testing of the Long Term Revenue (LTR) Insurance Plan. The concept of the LTR plan could be applied to most major commodity crops, however the Revenue Insurance Program focuses on underserved areas and crops. The resulting pilot addresses nine crops spanning 13 states (see table). In order to provide effective insurance coverage to a diverse array of crop types, three applications of LTR have been developed. These applications are:
As of October 2004, the LTR Dry Pea and Lentil Pilot Program and the LTR Dry Bean Pilot Program are up for review. |
LTR Annual LTR Regional LTR Perennial  |