Revenue Floor & Know Exactly When Your Insurance Pays

The revenue guarantee equals your APH (approved) yield × coverage level × the higher of the projected and harvest price: Guarantee = APH yield × coverage% × MAX(projected price, harvest price). For example, 180 bu corn at 80% coverage with a $4.66 projected price gives a floor of 180 × 0.80 × 4.66 = $671.04 per acre. Because Revenue Protection includes the harvest-price increase, the floor rises if prices climb.

It pays whenever your calculated revenue — actual yield × harvest price — falls below the revenue guarantee. The indemnity is MAX(0, guarantee − actual yield × harvest price). So a payout can be triggered by low yield, low price, or any combination of the two that pushes revenue under the floor, even if your yield alone was acceptable.

The trigger yield is the yield at the current harvest price that just meets your guarantee: trigger yield = revenue guarantee ÷ harvest price. Below it, the policy pays. At a $671.04 guarantee and a $4.00 harvest price, the trigger yield is 167.76 bu per acre — so even a 167 bu crop pays when the price has dropped to $4.00, because revenue, not yield, is insured.

Standard Revenue Protection uses the GREATER of the projected and harvest price in the guarantee. If prices rise after planting, your guarantee rises with them, so a short crop is valued at the higher price. The Harvest Price Exclusion option removes that upward adjustment for a lower premium — this calculator models the standard (greater-price) form.

The federal government pays a large share of the premium. For Enterprise units the subsidy is about 80% at 50–70% coverage, 77% at 75%, 68% at 80% and 53% at 85%; Basic/Optional units get less (67% down to 38%). Your out-of-pocket premium is the total premium minus that subsidy. This tool shows both the total and the farmer-paid premium per acre and in total.

APH stands for Actual Production History — the average of your verified yields over up to ten years, with substitutions and caps under RMA rules. It is the yield your guarantee is built on, so a higher, well-documented APH raises both your guarantee and your premium. Keep accurate production records to protect your approved yield.

Yield Protection insures only the bushels: it pays when yield falls below a guaranteed yield, valued at the projected price. Revenue Protection insures the dollars: it pays when yield × harvest price falls below a guaranteed revenue, so it covers both price drops and yield losses. Revenue Protection is the more popular plan for major row crops for that reason.

Raising coverage from 75% to 80% lifts your revenue floor by one band but the premium rate climbs faster than the coverage — and the Enterprise subsidy falls from 77% to 68%. Use the coverage-level ladder in the tool to compare the higher guarantee against the higher farmer-paid premium at each band, then pick the floor you can justify for your operation's risk.

The net-revenue floor is the revenue guarantee minus the premium you actually pay: it is the worst-case revenue per acre you are left with after buying the policy, before any other costs. It answers “if everything goes wrong, what's the least I'll have per acre?” and is the truest measure of the safety net the policy buys.

No — under standard Revenue Protection a higher harvest price can only help, because the guarantee uses the greater of the two prices. A higher harvest price raises your floor (protecting a short crop) and also raises the revenue you actually earn. The risk Revenue Protection guards against is the harvest price falling combined with, or instead of, a yield shortfall.

The revenue-floor logic is general: a sum insured (your guarantee) is compared with realized value, and the shortfall is the claim. India's PMFBY uses a yield-index sum insured with capped farmer premiums (about 2% Kharif, 1.5% Rabi, 5% commercial/horticulture). Enter your scheme's guarantee basis as the projected price × APH and read the floor and trigger; the premium-subsidy column reflects US-RMA figures.

They are solid planning figures. The guarantee and indemnity math is exact, but the premium depends on your county's actuarial base rate, your unit structure, options and any historical-yield discounts, which only your RMA-approved agent's quote can finalize. Use this tool to understand the floor, the trigger and the trade-offs, then confirm the premium with your crop-insurance agent.