If you are a farmer, it’s likely that you have been faced with the concept of agriculture insurance. In particular, you might be wondering what exactly crop insurance entails and what it can actually provide. This article aims to answer your basic questions so that you can make an informed decision regarding your agricultural investments.
What Is Crop Insurance?
Crop insurance is a form of insurance that protects farmers from losses caused by natural disasters, such as drought or floods. Crops that are insured are typically those which are grown for commercial or private use.
Farmers can use crop insurance to protect against the loss of crops or loss of revenue due to the price decline of certain agricultural commodities. This is often categorized into crop yield and crop revenue.
In most cases, pest infestations and plant diseases should also be covered by crop insurance.
How Much Does It Cost?
In general, insurance terms and premium rates are established by the Federal Crop Insurance Corporation (FCIC). This means that, unlike other forms of insurance, the rates for crop insurance should be the same across the board, no matter what provider or agency you connect with.
So, you should be able to expect an industry standard to dictate the cost. The exact number will depend on the market state and current FCIC approval.
Why Do Farmers Need Crop Insurance?
Crop insurance can be a major factor in a farmer’s success or failure. An unanticipated event, such as a natural disaster, can slash growth and ruin a farmer’s livelihood if not properly prepared for.
For this reason, crop insurance has become a necessity for modern-day farming. Farmers can avoid severe financial consequences and long-term damage to their livelihood.
It can be hard to recover from debilitating disasters and unexpected circumstances without having the proper insurance coverage. Even the inability to plant due to weather problems can be covered by insurance and helps keep a positive income stream despite weaker yields.
Of course, deductible amounts and coverage depend on the actual crop and county you’re in. This is particularly helpful for any crop year that has faced significant challenges.
Over a hundred commodities are covered by crop insurance, and different plans apply to crop, livestock, pasture, rangeland, and other perennials.
How to Get Crop Insurance
If you are a farmer and are considering crop insurance, the first step would be to compare the numerous different agricultural insurance companies and their policies. A crop can only be covered by one plan after all, so it’s best to figure out which coverage suits your needs the most.
Central crop insurance is available to any farmer in the United States via Crop-Hail and Multiple Peril Crop Insurance (MPCI). If you are a farmer, rancher, or any type of agricultural producer, you should be eligible to apply.
Farmer-paid premiums are even subsidized by the federal government, so costs are reduced.
Final Thoughts
When disaster strikes, it’s better to be covered. The Federal Crop Insurance Program (FCIP) can truly help you out and take away a lot of the risk factors that can hurt your efforts, so it’s better to continue any agricultural endeavor insured.
Crop Insurance Services by AMS is a market leader in the agricultural insurance industry and proudly provides risk management solutions for America’s farmers, ranchers, and producers. Contact us to get crop insurance in California.
