Which type of Crop Revenue Insurance provides a fixed revenue guarantee based on average county prices?

• A. Revenue Protection
• B. Revenue Assurance
• C. Yield Protection
• D. Price Guarantee

Answer: (B)

The type of Crop Revenue Insurance that provides a fixed revenue guarantee based on average county prices is known as Revenue Assurance. This insurance program is designed to protect producers against revenue loss due to lower commodity prices or lower yields. It establishes a guaranteed revenue level based on historical averages of county prices and the expected yield for the specific crop.

Revenue Assurance allows farmers to lock in a level of revenue based on county-wide averages rather than individual farm performance, which can provide a broader safety net in terms of revenue stability. This feature is particularly beneficial for producers in volatile agricultural markets, where prices can fluctuate significantly from season to season.

In contrast, other types of insurance, such as Revenue Protection, focus on covering both yield and price declines, but they are not solely based on county averages. Yield Protection specifically protects against losses in yield without considering price changes, while Price Guarantee focuses solely on the price aspect without ensuring overall revenue based on averages.

This understanding of how each type of Crop Revenue Insurance operates is crucial for farmers when choosing the right coverage to protect their financial interests.