Which crop insurance provides coverage based on the higher of market prices at harvest or earlier?

• A. Revenue Assurance
• B. Revenue Protection
• C. Yield Protection
• D. Price Index Coverage

Answer: (B)

Revenue Protection is the correct answer because it offers farmers a safeguard against both yield losses and declines in market prices. This type of insurance calculates the insured amount based on the higher of the market price at the time of harvest or earlier established prices, ensuring that farmers receive adequate compensation when the actual revenue falls below a predefined threshold.

The design of Revenue Protection aims to stabilize farmers' income by covering potential losses from both decreased crop yields and lower market prices, which is critical for their financial planning and risk management. Consequently, farmers can benefit from price fluctuations throughout the growing season while also receiving coverage for any reductions in yield due to adverse weather or pest conditions.

The focus on market price guarantees provides a more comprehensive safety net compared to other options, which may only concentrate on yield or have more limited price protection features.