Federal crop insurance policies are generally either yield-based or revenue-based. For most yield- based policies, a producer can receive an indemnity if there is a yield loss relative to the farmer’s “normal” (historical) yield. Revenue-based policies were developed after yield-based policies, in the mid-1990s, to protect against crop revenue loss resulting from declines in yield, price, or both. The most recent addition has been products that protect against losses in whole farm revenue rather than just for an individual crop. These two basic forms—yield-based and revenue-based— are discussed below. The text boxes in this report entitled “Crop Insurance Examples: Yield- Based vs. Revenue-Based”.
