By Scout Nelson
Crop producers continue searching for better ways to manage financial risk during uncertain growing seasons. The Crop and Livestock Income Protection program, known as CLIP, provides farmers with another insurance option designed to strengthen overall farm revenue protection.
Walker Davis and Amy Hagerman explained that CLIP works as an umbrella insurance policy added on top of existing Revenue Protection (RP) crop insurance coverage. Producers must still enroll in individual RP policies for each crop before becoming eligible for CLIP coverage. The program first becomes available during the 2026 crop year and focuses on producers growing two or more spring crops within the same county.
The insurance program works in two stages when crop revenue losses occur. First, individual RP crop insurance claims operate normally for each crop. After those claims are completed, the combined farm revenue from all insured crops is compared with the guaranteed CLIP revenue level. If total revenue falls below the guarantee, CLIP pays the remaining difference.
One important feature of CLIP is that the program may provide financial protection even when individual RP policies do not trigger losses. Coverage levels range from 55% to 85%, depending on the producer’s selected RP coverage level.
Comparing CLIP with other insurance choices, including higher RP coverage levels and the Supplemental Coverage Option, called SCO. Results show CLIP may provide similar revenue protection at a lower producer cost. Higher RP coverage levels often increase premium costs, while CLIP may offer a more affordable choice for farms growing several crops.
SCO and CLIP also operate differently during claims. SCO uses county-wide revenue losses, while CLIP focuses on the producer’s individual farm revenue results. This difference may help producers choose coverage that best fits their operation and risk management goals.
CLIP is now available in 13 states, including South Dakota, Kansas, Oklahoma, Texas, Nebraska, and North Dakota. Farmers interested in the program should contact licensed crop insurance agents before enrollment deadlines to review available coverage options and improve long-term financial stability.
Photo Credit: istock-fotokostic
Categories: South Dakota, Government & Policy