What does the area revenue with harvest price exclusion (ARPHPE) insurance plan exclude?

The area revenue with harvest price exclusion (ARPHPE) insurance plan specifically excludes upside harvest price protection, meaning that while it provides a safety net against revenue losses, it does not allow for an increase in coverage based on higher harvest prices.

Under traditional revenue protection plans, if the harvest price is higher than the base price, the policy would adjust to provide greater revenue coverage based on that higher price. However, the ARPHPE plan does not adapt in this way; it maintains the initial base price and does not take advantage of potential market increases at harvest time.

This structure makes ARPHPE particularly suited for farmers who believe that the market price will not exceed the original base price significantly, allowing for potential cost savings on premiums. Thus, ensuring they are covered against losses but without the added premium costs associated with upside protection.

In contrast, the other options like base price protection, all revenue protection, and basic yield protection have different structures and would not apply to the specifics of the ARPHPE plan, thereby emphasizing the unique nature of the upside harvest price exclusion.