Catastrophic crop insurance (CAT) is a component of the U.S. federal crop insurance program, originally authorized by the Federal Crop Insurance Reform Act of 1994 (P.L. 103- 354).[1] CAT coverage compensates farmers for crop yield losses exceeding 50% of their average historical yield at a payment rate of 55% of the projected season average market price. CAT coverage requires that a farmer realize a yield loss of more than 50% and only makes payments on losses exceeding the 50% threshold. Producers pay no premium for CAT coverage, but except for cases of financial hardship, must pay an administrative fee of $300 per crop. A producer has the ability to purchase additional insurance coverage (or buy-up coverage) beyond CAT coverage, but must pay a premium, partially subsidized by the government.[2]
References
edit- ^ Duncan, John; Myers, Robert J. (2000). "Crop Insurance under Catastrophic Risk". American Journal of Agricultural Economics. 82 (4): 842–855. doi:10.1111/0002-9092.00085. ISSN 0002-9092. JSTOR 1244524. S2CID 73612805.
- ^ "Catastrophic Risk Protection Endorsement; Area Risk Protection Insurance Regulations; and Common Crop Insurance Policy Basic Provisions". federalregister.gov. Retrieved 2016-12-10.
This article incorporates public domain material from Jasper Womach. Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition (PDF). Congressional Research Service.
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