Understanding the Benefits of Crop Insurance
Farm insurance is a set of comprehensive policies that are designed to cater to the needs of farmers for both professional and commercial farming purposes. In context to the crop insurance policy, farmers can get risk-management insurance from public or private sector crop insurance agencies.
Crop insurance is an effective strategy in farming where farmers can collaborate with insurance agencies to get various yield and financial benefits. This page will help you explore the fringe benefits of crop insurance in the farming industry, along with an in-depth understanding of the multiple terminologies used in the context of crop insurance.
Crop insurance refers to the paradigm in which farmers are provided with financial protection against losses of their crops due to any adverse event or disaster. Yields may be harmed due to various risk factors, including drought, fire, disease, price fluctuation, or any unexpected or uncontrolled event like these.
Crop insurance has been recognized as a crucial risk management tool that protects ranchers from crop damages through financial aid. The FCIP Program (Federal Crop Insurance Program) launched in the U.S. provides excellent crop insurance coverage to agriculture producers so that they may take risk-free initiatives to protect their crops from adverse conditions.
Multiple Peril Crop Insurance (MPCI)
Revenue Protection (RP)
Revenue Protection is an important aspect of a crop insurance policy. RP provides potential financial coverage to farmers against crop damage or losses due to:
- Natural Disasters: drought, excessive moisture, hail, wind, frost, or disease.
- Revenue Losses: low yields, low prices, or sometimes both.
Area Risk Protection (ARP)
Area Risk Protection, or ARP, is associated with crop insurance that insures farmers against large-scale yield loss at the country level. The farmers enrolled in ARP crop insurance must ensure the following:
- Deliver data sources regarding establishing yields.
- Provide production reports to the agency.
Yield Protection (YP)
Yield Protection (YP) policy is an exclusive crop insurance coverage that provides financial protection to the farmers against a yield production below the predetermined amount. It is best for tackling with unavoidable yield losses triggered by:
- Earthquakes, droughts, tornados, lightning, floods, etc.
- Wildlife damage, plant disease, insect infestation, and imbalanced environmental conditions.
Crop Hail Insurance
Crop Hail Insurance is a sort of crop insurance policy that is mostly provided to the farmers staying at the mercy of sudden or instant weather changes/events. However, it insures the crops until they are set in the farm/ not-harvested yet. It covers:
- Physical damage of crops due to hail.
- Loss of yield due to other weather-related risks, i.e., drought, frost, wind, excessive moisture and vandalism.
Crop Hail / Companion Hail Insurance
Companion Hail Insurance has an edge over mere Crop Hail coverage in terms of providing flexible insurance for yield loss. It includes crop damage coverage to the farmers at the stage where the MPCI policy fails to support the yield/revenue compensation. It is flexible, too:
- Execute additional coverage to crop damage due to hail.
- Insure crop damage recovery with premium companion hail insurance plans.
Crop Revenue Insurance
Crop Revenue Insurance is an easy defense for the farmers to prevent their revenue loss caused by fluctuating market prices. CRI offers harvest price options to crop revenue insurance seekers to help them replace their lost revenue with elected insurance coverage. CRI is valid where:
- Farmers face yield loss due to decreased market prices of crops at the time of harvesting.
- Agriculture producers go through yield reduction due to any sudden disastrous event or damage.
Important Definitions / Terminologies Related to Crop Insurance
Actual Production History (APH)
Calculated Revenue (CR)
Sales Closing Date
Final Planting Date
Acreage Reporting Date
Date to File a Notice of Crop Damage
End of the Insurance Period
Payment Due Date
Production Reporting Date
Debt Termination Date
It has been observed from ancient times that crops are often subject to massive loss when they come into contact with any contagious disease, sudden environmental change, or natural disaster. Farm insurance policies are designed to help farmers insure crop production through risk management.
Farm insurance plans have served an enormous number of farmers with crop insurance plans. Once you adopt a certain crop insurance plan, you can get benefits from the premium deals. Crop insurance helps you to achieve your targeted leads despite suffering from sudden crop damage or imbalanced market prices.