Coverages | MPCI | Cotton

MPCI for Cotton

Multiple Peril Crop Insurance provides comprehensive protection against weather related causes of loss and certain other unavoidable perils. Coverage levels are available from 50 to 75% in increments of 5% (80 and 85% coverage levels available in limited areas) of the Actual Production History (APH) and up to 100% of the price election1 . Coverage is expressed as a yield guarantee (APH yield times the coverage level) and may be adjusted for quality deficiencies. Minimum coverage (CAT) is available at 50% of the APH and 55% of the price election (50/55). MPCI provides late and prevented planting protection. (See the prevented planting brief for additional information on prevented planting).

Yield Guarantee

The guarantee is the historical yield (APH), multiplied by the level of coverage and the insured acreage.

Production to Count

The actual production plus any yield appraisals less any adjustments for poor quality results in the production to count for the insurance unit.

Loss Payment

The loss payment is calculated by subtracting the net amount of production from the yield guarantee and multiplying the result by the MPCI price election and ownership share.

Units

The basic insurance unit is all the acreage of the crop in the county in which the policyholder has 100% ownership or shares with the same person. Most basic insurance units can be further divided into optional units. Optional units may be divided by sections or section equivalents (in areas without sections or section equivalents, separate farm serial numbers (FSN) may be used), and by irrigated or non-irrigated practices. In AR, LA, and MS, units are only available by FSN. To qualify, a producer must have individual records for each unit and the planting pattern between the units must have a discernible break. Growers can also choose a county crop enterprise unit at a reduced premium in all MPCI counties in AL, AZ, AR, CA, FL, GA, KS, LA, MS, MO, NM, NC, OK, SC, TN, TX, and VA.

How It Works (corn illustration)

Yield Guarantee	650 lb./A. × 75% × 100 A.=	48,750 lb.
Production to Count	390 lb./A × 100 A.=	39,000 lb.
Production Loss		9,750 lb.
Loss Payment (indemnity)	9,750 lb. × $0.64 price election=	$6,240

Reporting Changes or Crop Damage

Producers should notify their crop insurance agent or company immediately to get specific instructions if any of the following occurs:

1. If the producer wants to make a change in the amount of protection,
2. If there is a change in the farm operation (entity, crops, county, etc.), or
3. If the crop is damaged or the producer plans to utilize production in such a way that harvested production cannot be determined.

Benefits

1. Confidence for preharvest crop sales.
2. Stability for long term business plans.
3. Improved risk and financial management.
4. Cash flow safety net.
5. Loan collateral.
6. U.S. D.A. shares in premium costs.

Availability

MPCI is available for most cotton production nationwide. MPCI is also available for over 50 crops nationwide in most commercial areas.

1-The price election may vary by geographical area.
03/23/01 -- 11/04

Note: This summary is for general illustration only. See policy for program details.