What is the basis for triggering revenue (guarantee) in the area revenue with harvest price exclusion (ARPIwHPE)?

The basis for triggering revenue (guarantee) in the area revenue with harvest price exclusion (ARPIwHPE) is indeed the county yield multiplied by the projected price. This approach utilizes specific data related to the area in which the farm is located to estimate potential revenue.

In ARPIwHPE, components such as the county yield reflect the average production levels of various crops within a designated county, while the projected price represents the expected market price at the time of planting or during the crop year. By multiplying these two figures, farmers can obtain a revenue guarantee that acts as a safety net against lower-than-expected revenues due to various factors like adverse weather conditions or market fluctuations.

This method is distinct from other options that focus on state averages or past performance. For example, the state average price and historical revenue of the farm do not account for the specific conditions affecting a particular county. Similarly, the maximum allowable yield does not directly relate to the revenue guarantees in ARPIwHPE, which are designed to provide a more dynamic and localized approach to crop insurance. Therefore, the multiplication of county yield by projected price effectively captures the economic realities faced by farmers, making it the correct basis for triggering the revenue guarantee in this insurance program.