Crop Insurance
Federal and private crop insurance protecting farmers against losses.
Typical cost: Varies by crop and coverage
What Is Crop Insurance?
Crop insurance protects farmers from financial losses when crops are damaged by natural disasters, disease, pests, or price declines. The federal crop insurance program, administered by the USDA Risk Management Agency (RMA), provides subsidized coverage for over 130 crops.
Types of Coverage
Yield-based policies pay when actual yield falls below your guaranteed yield. Revenue-based policies protect against both yield losses and price declines. Whole-farm revenue policies cover diversified operations. Area-based policies pay when county-wide losses occur.
How It Works
Farmers purchase crop insurance through private insurance companies, with premiums partially subsidized by the federal government. Coverage levels range from 50% to 85% of expected revenue or yield. Claims are paid when losses exceed the deductible.
What's covered
Yield Protection
Pays when your actual crop yield falls below your guaranteed yield level.
Revenue Protection
Covers losses from both reduced yields and price declines in commodity markets.
Whole Farm Revenue
Protects total farm revenue for diversified operations growing multiple crops.
Prevented Planting
Pays when weather or conditions prevent you from planting insured crops.
Replanting Coverage
Covers costs to replant crops destroyed early in the growing season.
Quality Adjustment
Accounts for reduced crop quality that affects marketability and price.
Pros and cons
Advantages
- Federal premium subsidies make coverage affordable
- Protects against weather disasters beyond your control
- Revenue protection hedges against price volatility
- Required for USDA farm loan eligibility
- Covers prevented planting when you can't get crops in the ground
- Whole farm options for diversified operations
Considerations
- Complex program with many coverage options
- Deadlines for sign-up and reporting are strict
- Coverage may not fully replace losses at low coverage levels
- Premium costs increasing in high-risk areas
- Requires working with approved insurance agents
- Documentation and records essential for claims
Frequently asked questions
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