What is the basis for determining a loss under the Group Risk Plan (GRP)?

The Group Risk Plan (GRP) is designed to provide coverage based on the average yield of the county rather than on an individual producer's specific yields. The basis for determining a loss under the GRP is the county index, which calculates the difference between the county's average yield and an established trigger yield. When the actual county yield falls below this trigger, producers who have purchased GRP coverage will receive a payment based on the loss relative to that county average.

This approach allows the GRP to effectively pool the risk across a larger group of farmers within the county, making it a broader risk management tool. By focusing on the county index, it reflects the general agricultural conditions and risks faced by farmers in that area, rather than individual circumstances, thus providing a safeguard against widespread losses due to events like droughts or floods that affect a significant portion of the county's acreage.