South Dakota Crop Insurance Practice Exam

What does the Yield Protection Plan guarantee?

1. A production yield based on the producer's APH

2. A fixed revenue amount

3. Full compensation for crop losses

4. Coverage for market price fluctuations

The correct answer is: A production yield based on the producer's APH

The Yield Protection Plan guarantees a production yield based on the producer's Actual Production History (APH). This plan specifically aims to protect farmers against yield losses due to factors such as adverse weather conditions, disease, pests, or other events that could decrease the production level of their crops. By using the producer’s historical yield data to determine coverage levels, the plan provides a safety net to ensure that, in the event of a loss, producers receive compensation aligned with their past performance, thus helping them maintain financial stability despite the challenges that can affect their yields. While fixed revenue amounts, full compensation for crop losses, and coverage for market price fluctuations can be important components of different agricultural risk management strategies, they are not the primary focus of the Yield Protection Plan. This plan is specifically about yield guarantees, making the connection to APH critical in understanding its purpose and application in crop insurance.