Exploring Diverse Crop Insurance Options for Cotton Producers

The risk in crop production, encompassing yield fluctuations and market price volatility, presents uncertain conditions for agricultural producers. To address and alleviate these uncertainties, the use of crop insurance is a key risk management strategy. The different crop insurance policies available for cotton producers frequently results in uncertainty concerning the variety of policies accessible and the specific regions where these policies are applicable.

For upland cotton, a range of Federal crop insurance plans serves to mitigate the inherent risks associated with cotton production. The Federal Crop Insurance Program (FCIP) for upland cotton encompasses three insurance plans offering farm-level protection against deep losses, which include complete losses. Yield Protection (YP) offers protection against only farm-specific yield losses, while Revenue Protection (RP) is designed to counter revenue losses triggered by variations in futures prices and farm yield. Revenue Protection with Harvest Price Exclusion (RP-HPE) also guards against revenue decline based on futures prices and farm yield but without the benefit of an adjusted revenue guarantee when harvest prices are above projected prices. READ THE FULL ARTICLE HERE.

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