Crop & Livestock Income Protection

CLIP is a new product available in the spring of 2026. The pilot area includes Texas, Oklahoma, Kansas, Colorado and Nebraska. CLIP stands for “Crop & Livestock Income Protection” and places an umbrella coverage over certain RP policies. The only livestock coverage currently available is the Weaned Calf policy so the emphasis will be on crop coverage. Key crops that can be included are corn, cotton, grain sorghum, peanuts, soybeans and sunflowers. The only wheat that can be included in the pilot is spring wheat.

Why CLIP?

CLIP allows a producer to have an umbrella coverage over the selected RP products. The umbrella can be as low as the highest RP coverage level for the chosen crops and can be a maximum of 25% over the lowest RP coverage level for the chosen crops. The maximum CLIP coverage level is 85%.

Example:

Corn RP coverage level is 65%
Grain sorghum RP coverage level is 70%
Cotton RP coverage level is 60%

The highest crop coverage level is grain sorghum so the CLIP guarantee must be at least 70%. The lowest crop is cotton so the maximum CLIP guarantee is 85%.

The CLIP coverage level is chosen in 5% increments so in the example above, the selected levels could be 70%, 75%, 80% or 85%.

The CLIP liability would consist of the difference between the selected CLIP coverage level and each crop’s coverage level (shown in blue).

How It Works.

If cotton has an RP loss while corn and sorghum made over their respective RP guarantees, that would all net out against the total CLIP guarantee. CLIP functions as a “whole farm” program but offers greater flexibility:

No tax returns
Producer picks which crops and counties can be included in the CLIP coverage (see below for important info)
Settles as soon as production is entered and/or claims are settled for the underlying RP policies
Same subsidy as whole farm revenue policy

To use CLIP, a producer must cover at least two crops with at least two of the crops each having at least 10 percent of the total crop liability for all of the crops insured under CLIP. This liability test is based on the projected prices for each crop.

A producer can elect to have CLIP in one county and not in another or can choose CLIP for multiple counties. CLIP can be used with MCEU but the net claim or production will be just for the crop in the MCEU in that county.

CLIP can be used with ECO and MCO but it cannot be used with SCO as the coverage bands overlap. Given the 80% subsidy level for SCO, CLIP will be slightly more expensive depending on the crop and underlying coverages. However, CLIP offers the following benefits over SCO:

The CLIP loss, if any, is determined by the producer’s individual APH and harvested yields - not the county yields
CLIP settles as soon is production is entered and/or claims closed - not the next crop year as with SCO
The CLIP guarantee is “bankable” since it depends on the individual’s APH and harvest yields
Given the increase in hail premiums over the last two years, CLIP can fit into risk management with RP and decreased hail coverage where SCO cannot substitute for hail coverage

Producers must choose their CLIP commodities by the sales closing date of the earliest crop’s sales closing date to be included in the coverage. As mentioned above, CLIP will not work with SCO and the following policies or endorsements:

YP
RP-HPE
Malting barley endorsement
MP
STAX
PACE

CLIP is available to use with the cottonseed endorsement (SE) but the liability and losses from SE will not count in the CLIP calculation. The same is true for prevented planting payments and the downed rice endorsement.

Real World Example

Now look at RP + SCO versus RP + CLIP + ECO. The SCO covers to 86% while the CLIP covers to 80%. However, by purchasing the ECO at the 4% band (90% - 86%), the producer achieves mostly the same total coverage but with a slightly different coverage profile and still has most of the coverage based on his actual production (not a county trigger). This achieves almost the same total coverage as SCO, but it is now mostly based on his individual production and gets paid quicker. The ECO and SCO would pay out at the same time, but the largest percentage of a loss would be paid once the RP claims are settled and/or all the production is accounted for.

Questions?

Let SCIS help you in determining if CLIP is right for your operation. It won’t fit in all cases, but it deserves a look in your risk management decisions for the coming year. Please contact us for more details.

For other questions, visit RMA's FAQ page

Think CLIP Might Be A Fit For You?

Reach out to an SCIS agent today!