There are all kinds of insurance products out there and there are new products in the pipeline. An example: crop insurance. A Fremont Tribune article, Insurance a bigger factor in planting picture, discusses the importance of farmers maintaining both crop and revenue assurance policies, so that they can deal with any catastrophes –natural or economic – that happen to come their way.
In fact, some farmers consider this insurance essential to their business, saying that they won’t plant their crops without first acquiring insurance. According to the article, “as recently as the 1990s, many farmers passed up crop insurance and counted on the federal government to come through with disaster programs for droughts and other widespread weather perils.” Since the 1990s, crop coverage has improved to also provide coverage for revenue protection. The article notes that since revenue policies were introduced, most farmers now favor having insurance for their crops and revenues.
Their insurance is funded in part by tax revenues, an average of 60% of the insurance premiums, costing taxpayers about $10 billion a year. The article points out that “among federal agricultural expenses, ‘it’s become the biggest single budget item at the moment.’” Some claim that if taxpayers didn’t subsidize crop insurance, many farmers would not purchase it, and farmers would again rely on disaster programs.
Rob Heyen, of Crop Insurance Solutions, stated that “any stable government needs a stable, consistent and reliably inexpensive food supply.”
If you’re a farmer without insurance, I strongly advise you to evaluate your risks and determine whether you can afford crop insurance. It’s always great to hedge your bets against the unknown, especially in an industry where a short run of bad luck can ruin your entire business.