WV Small Farm Center

Adjusted Gross Revenue-Lite

What is AGR-Lite?

Adjusted Gross Revenue-Lite (AGR-Lite) is a whole-farm revenue protection plan of insurance. The plan provides protection against low revenue due to unavoidable natural disasters and market fluctuations that affect income during the insurance year. Most farm-raised crops, animals, and animal products are eligible for protection.

AGR-Lite can stand alone or be used in conjunction with other Federal crop insurance plans, if producers purchase both AGR Lite and other Federal crop insurance, the AGR-Lite premium will be reduced.

How does AGR-Lite work?

  • Uses a producer’s 5-year historical farm average revenue as reported on the IRS tax return (Schedule F or equivalent forms) and an annual farm report as a base to provide a level of guaranteed revenue for the insurance period.
  • Provides insurance coverage for multiple agricultural commodities in one insurance product.
  • Establishes revenue as a common denominator for the insurance of all agricultural commodities.

Who is eligible?

  • Be a U.S. citizen or resident;
  • File a calendar year or fiscal year farm tax return;
  • Have liability not exceeding $1 million (less than $2,051,282 in approved gross income);
  • Have had the same tax entity for 7 years (filed 5 consecutive years of Schedule F tax forms, plus previous year and insurance year) unless a change in the tax entity is reviewed and approved by the insurance provider;
  • Have no more than 50 percent of total revenue from commodities purchased for resale; and
  • Have no more

What is covered?

Insurance is provided against revenue loss due to any unavoidable natural occurrences during the current or previous insurance year or due to market fluctuations that cause a loss of revenue during the current insurance year. No payment will be made for losses due to negligence, mismanagement, or wrongdoing by the producer, the producer’s family, members of the household, tenants, employees, or contractors; crop abandonment; bypassing of acreage; or other uninsurable causes listed in the insurance policy.

What are the next steps?

AGR-Lite’s sales closing date is March 15. The cancellation and termination date is January 31.

Choosing a revenue guarantee:
  • Coverage levels and payment rates vary with the number of commodities produced and are selected by the producer.
  • AGR-Lite liability is calculated by multiplying the approved adjusted gross revenue by the selected coverage level and payment rate.
  • The selected coverage level determines when the indemnity is paid; the payment rate determines how much is paid; the coverage amount is to cover ALL commodities.

Available Protection Amounts AGR-Lite

How does payment work?

Loss payments are triggered when the adjusted income for the insured year is less than the loss inception point.
Loss inception point= AGR x Selected coverage level Example:
  • 80 percent coverage level with a 75 percent payment rate. AGR=$100,000, but the actual revenue that year was $70,000.
  • Liability: 100,000 x .8 x.75=$60,000
  • Loss of Inception: $100,000 x.8= $80.000

Loss inception point ($80,000) – actual revenue ($70,000)= loss of revenue ($10,000) Then loss of revenue ($10,000) x payment rate (.75) =Indemnity ($7,500)

For a deeper understanding and look at AGR-Lite, view our Program Leader's presentation here!