What is Actual Production History (APH) insurance?

Actual Production History (APH) insurance is specifically designed to provide coverage based on the historical yield of a farmer's crop. This type of insurance is calculated using the average production of the crop over a specified period, typically several years. By using past yield data, APH insurance aims to protect producers against yield losses due to various causes such as weather events, disease, or market fluctuations.

The strength of APH insurance lies in its reliance on historical performance, which allows it to offer more tailored protection that reflects the specific conditions and challenges faced by the individual farmer. This feature supports farmers in managing the risks associated with unpredictability in agricultural production. Understanding how this insurance integrates with historical data is crucial for those involved in crop management and insurance planning.