It is designed to provide comprehensive protection to farmers’ revenues – not just yield or price protection. It covers sharp drops in expected revenue, possibly resulting either from a decline in yields or prices, or a combination of the two. Farmers are compensated when any combination of harvested yield times the harvest price results in insurance revenue that is less than the revenue guaranteed. The following revenue insurance plans provided by the Risk Management Agency of the USDA are illustrative of the potential ways in which revenue insurance can be provided.
