The revenue protection plan protects against loss of revenue caused by which factors?

The revenue protection plan is designed to safeguard farmers against the loss of revenue due to two primary factors: price variance and low yields. This insurance mechanism provides coverage that takes into account both the market price fluctuations of the crops and the actual yield that a farmer can produce.

When crop prices are lower than anticipated, or when yields are below normal due to unforeseen circumstances like adverse weather conditions, farmers can face significant reductions in their income. The revenue protection plan addresses this by ensuring that farmers receive compensation that reflects potential revenue losses resulting from both low yields and price drops.

Understanding the nature of these risks is crucial for farmers, as both yield and price can critically impact their overall profitability. This insurance product combines these two aspects into a single coverage area, enabling more comprehensive financial protection than if farmers were only covered for low yields or only price issues.

Other options, while they may highlight specific concerns, do not encompass the broad spectrum included in the revenue protection plan. The correct identification of price variance and low yields illustrates the holistic approach taken by this plan to ensure that farmers can be financially stable despite market challenges.