| URBANA, Ill. — Some observers are now questioning the advisability of using Group Risk Income Plan (GRIP) crop insurance policies in 2007, said a University of Illinois Extension farm financial management specialist.
GRIP is a crop insurance product that uses county yields in calculating revenue. It differs from other revenue products that use farm yields in calculating revenue.
“GRIP premiums will be much higher in 2007,” said Gary Schnitkey. “A GRIP product that cost between $20 and $25 in 2006 will cost in the $40 to $45 range in 2007. In 2006, GRIP made payments in only a few counties, causing some to question whether GRIP will make payments in 2007.”
Schnitkey’s study GRIP in 2007, which can be read online at www.farmdoc.uiuc.edu/manage/newsletters/fefo07_04/fefo07_04.html, examines the projected costs and performance of GRIP for Illinois farmers in 2007.
“In terms of expected performance, GRIP in 2007 does not differ markedly from previous years,” he concluded. “Choice of GRIP over other farm-related products should be based on similar criteria as in previous years.
“When looking at risk position, farmers in more vulnerable positions should choose farm-level products over GRIP. On farms whose yields more closely track county yields, GRIP payments will be more highly correlated with farm-level experience, thereby enhancing the risk protection offered from GRIP.”
Schnitkey’s study includes maps that show relevant date for GRIP in Illinois counties plus calculations for GRIP at various coverage levels. |
