|
The 2006 Group Crop Insurance Plan Calculator compares the group crop insurance plans currently available in Illinois : Group Risk Plan (GRP), Group Risk Income Plan without a Harvest Revenue Option (GRIP-NoHR), and Group Risk Income Plan with a Harvest Revenue Option (GRIP-HR). For each of these, the Calculator shows estimated premiums, average payments, and net costs. An example of the output is shown below:
In the yellow input section, entries of the county, crop, protection level, expected price, and volatility are made. The expected price and volatility values influence the premiums of the GRIP products and will not be set by RMA until the beginning of March. The program comes with volatility defaults from 2005. Based on these input, the Calculator shows the expected yield, GRP maximum protection level, and GRIP maximum protection level.
The Calculator shows a panel giving "Estimated Producer Premiums Per Acre." These premiums are estimated because the expected price and volatility entries will not be known for certain until the beginning of March. In all cases, GRIP-HR has significantly higher premiums than GRIP-NoHR and GRP. In the above example, GRIP-HR has a per acre premium of $20.29 at a 90% coverage level compared to a $15.50 premium for GRIP-NoHR.
The Calculator shows a panel listing "Per Acre Average Payments Over the Last 32 Years." These are average payments calculated using data from 1972 through 2003. This historical data are adjusted to terms of today's yields and today prices. The adjusted payments can be viewed by clicking on the "Payment" button. Because the data are adjusted to today's terms, the estimated payments do not equal historical payments. These averages provide a feel for the likely payments over time from the insurance products if history repeats itself. Obviously, history does not have to repeat itself. Note that GRIP-HR has higher expected payments than the other products. At the 90% coverage level, the expected payment for GRIP-HR is $25.99 compared to $20.54 for GRIP-NoHR and $35.03 for GRP.
"Net positions" reported by the Calculator equal average payments minus the producer premiums. Positive values indicate that the indemnity payments, averaged over time, likely will exceed premiums paid.
|
