What is Crop insurance?
Crop Insurance is that insurance which is acquired by agricultural producers and farmers to secure their business future. Its is provided by federal government to hand shake with agriculture field. What is crop insurance? Actually crop insurance is there to protect the agriculture and farmer from the loss of crops either from natural disasters like drought, floods and also from financial loses if the prices of crops fall.
What are the types of crop insurance?
As we know, crop insurance is to provide reliefs from unexpected events and unexpected losses. So there are two types of insurances for them;
Crop-Yield - Crop yield is to provide expected revenue due to unconditional yields which is the volume of crop harvest.
Crop-Revenue - Crop revenue insurance is there to protect expected revenue comparing with crop selling loses due to price variations in market.
How does Crop Insurance work?
Every year, there’s made an agreement between Approved Insurance Providers (AIPs) and ProAg and between Federal Crop Insurance Corporation (FCIC) for the administration of Crop insurance policy. The government has signed a contract with private insurance policy companies for better opportunities and facilities to people. The companies collect data’s, claims from people, marketing policies and transfers the data to Federal government.
How crop insurance price is determined?
As we know, crop insurance is to provide relief to agricultural producers and the price of a crop insurance is determined by taking average estimated future prices of the crop. The last assurance is given by multiplying the higher price either the estimated price or the market price of harvested crop.
What is the spring price for crop insurance?
2020 Crop spring prices are the lower price for crop insurance since last decade. For corn crop, the crop insurance price is 3% low then last year’s policy. It was declared at $3.88 per bushel.
Similarly, for soybean crop, crop insurance price is almost 4% lower than 2019’s prices and it was announced at $9.18 per bushel. And for Spring cotton, the insurance price is 7% less than previous year’s price and is declared at only 68 cents. These are the lowest spring prices for crop insurance.
What is premium in agriculture?
As w know, premium are the paid amounts the the insured person by the insurer for unexpected loses and to reduce its financial risks. This process divides the lose or risk between the insured and the insurer.
In case of crops, annually the premium of 5% is paid by the farmer to cover the lose. Similarly, same amount is also paid by the government for the full transfer of insured money to the sufferer. In this way, loses are covered and full amounts are transferred to the insured person.
How does crop insurance help agricultural productivity?
Crop insurance influences the farmer in various ways like;
-
Protection - Crop insurance provides protection from financial loses and other hazards. In this way, it provides stability to farmers and they work for long term.
-
Technology - Crop insurers are promise to provide new advancements and new machines for crops to get harvest quickly.
-
Awareness Crop insurance staff provides awareness to uneducated farmers that how to grow up their yield and business. They also make people aware from natural climates and hazard of nature to take step regarding their safety and concern.
Frequently Asked Questions
People ask some usual questions before buying this crop insurance;
How much money do crop insurance agents make?
Salaries of crop insurance agents are high because they have to work much for proper details. They are also qualified agents who have proper education of calculation and terms.
According to Salary.com, their salaries fall between 42,200 hundred lakh to 46,000 hundred lakh. That’s why there is much demand n this profession of agriculture.
What percentage of farmers have crop insurance?
In 2018, farmers planted 240 million acres of four major crops which are corn, soybean, wheat and cotton. Crop insurance coverage for these four crops in 2018 is calculated and estimated as 208 million acres which shows that farmers have 87% of crop insurance coverage.
Conclusion
Insurances are there to protect people from financial loses and to support them in case of unexpected horrors and events. What is crop insurance? Crop insurance is for farmers to protect them financially and to give them ease in producing more and more crops which provides food to eat and stablizes the economy of the country. That’s why government provide this insurance policy to farmers.