GRP/GRIP Frequently Asked Questions

What is the release policy on GRP/GRIP acres?

Under GRP/GRIP, the insured crop is what is planted with intentions for harvest and reported with the acreage reporting form. If a second crop is to be planted on insured acreage, the acreage for the second crop will need to be reported as planted on previously insured acreage and turned in by the second crops acreage reporting deadline if you wish to insure the second crop. Previous approval by an adjuster is not required. There is no short-rate provision with GRP/GRIP, so any acreage that was put to the second crop would not cause a reduction in premium but would not be covered if the second crop were insured. In regards to sorghum following wheat, if the sorghum were to be insured with an APH-based insurance product, the provisions regarding pull off dates for cattle or heading of the wheat would have to be met to insure the sorghum. If the second crop is not insured, then coverage would remain in force on the GRP/GRIP crop and full premium would be due.

What coverage is available to the second crop following GRP/GRIP?

The coverage available for the second crop will follow the standard 65%/35% rule available for APH-based crops. The caveat is that you will not know the exact amount you will collect under the GRP/GRIP coverage until the next spring.

How are Expected County Yields determined by RMA?

RMA uses a weighted factor system of 30 years of NASS data to determine the Expected County Yield. There is no limit on the amount of change of the Expected County Yield from one year to the next. The payment yields used in calculating GRP/GRIP payments will be based on NASS yearly data as specified in the actuarial document for that crop and county.

Can I purchase GRP/GRIP from one agent and APH-based products from a different agent?

 Yes. These are two separate policies and can be bought from different agents. GRP/GRIP is provided on a county basis, so all grain sorghum in the county will be insured with GRP/GRIP and cannot be insured with other federal crop insurance policies such as APH, CRC, IP, or RA.

Do I need hail insurance with GRP/GRIP?

 Yes. GRP/GRIP only covers losses on a countywide level. If you are hailed out and the county suffers only minimal losses, you will not receive any indemnity from GRP/GRIP. Hail insurance will need to be looked at in the total insurance package for the crop. One benefit to this system is that hail insurance need only be purchased once a crop has a good chance to produce.

When do indemnity payments arrive?

Company policy is to pay as soon as possible after yields are released by NASS on March 1. The latest dates allowed by law would be the RMA release dates which are as follows: April 1 for wheat; April 16 for corn, soybeans, and grain sorghum; May 1 for forage production and rangeland; June 16 for peanuts; and July 16 for cotton following the crop year.

How does GRIP differ from GRP?

GRIP differs from GRP in that GRIP has its base price set by an average of the February futures price for December corn of the harvest year multiplied by a factor determined by RMA. This factor is the same for CRC and is based on USDA estimates of corn and grain sorghum prices. The GRP base price is set by RMA and not based on a futures price. GRIP also computes losses based on the income of the county (yield x base price) versus GRP that is only yield based.

Is GRIP-HRO available for grain sorghum as it is for corn and beans?

Yes. The sorghum harvest price option for 2005 has been approved by the FCIC board of directors. GRIP-HPO will be available immediately. HRO adds a harvest price component to the calculation and income will be the higher of the base price or harvest price x yield.