Which insurance component considers both crop prices and reduced yields?

Margin Protection (MP) is the insurance component that considers both crop prices and reduced yields. It is designed to protect producers against a combination of revenue loss from lower prices and reduced yields. This type of insurance takes into account the margin – the difference between the revenue received from selling crops and the cost of production. In the context of crop insurance, if either the price of the crop decreases significantly or the yield falls below expected levels, the policy would provide coverage to help mitigate the overall financial impact on the producer.

This is different from other components, such as Actual Production History (APH), which primarily focuses on the historical yield of crops without directly addressing price fluctuations. Area Revenue Protection (ARP) also looks at revenue but is based on average area yields and prices rather than individual margins. Price Risk Management is a broader term that refers to strategies or tools used to manage the price volatility of crops, but it does not specifically represent an insurance product that combines yield and price coverage in the same way Margin Protection does.