For farmers, ranchers, and other agricultural producers, crops are your livelihood. Bad weather, drought, insect damage, and other issues can devastate your business. However, those losses can be mitigated and handled if you have crop insurance. Crop insurance covers many of the common products that Midwest farmers grow. Read on to learn what makes the list of insurable crops.
What are Insurable Crops?
The Farm Credit Administration reported that in 2015, insurance covered 8.9 percent of major crops (including corn, cotton, barley, rice, peanuts, potatoes, tobacco, and wheat).
Crops that commonly qualify for insurance coverage include the following:
- Barley
- Fruit/Orchards
- Grapes
- Oats
- Rye
- Sweet Corn
- Tomatoes
This is not an exhaustive list of crops that may be covered. Others may be included in a policy, depending on the location or size of your farm.
What Crops are Not Insurable?
Insurance coverage isn’t available for every crop you might choose to grow. Insurance isn’t always available for the following crops, according to the Non-Insured Crop Disaster Assistance Program:
- Crops grown for fiber
- Crops grown in a controlled environment
- Specialty crops
- Sea oats or seagrass
- Seed stock produced for sale as seed stock
Why Don’t All Farmers Purchase Crop Insurance?
In 2016, Successful Farming discussed some reasons that farmers might forego crop insurance. A report by Katie Farrin, Mario J. Miranda, and Erik O’Donoghue, from USDA’s Economic Research Service, found that farmers sometimes substitute financial savings for insurance protection.
“A main finding is that insurance demand, when farmers face two or more growing years, is less dependent on how risk-averse a farmer is, as uptake and choice of coverage level is more dependent on the producer’s financial wealth,” they wrote. “We find that crop insurance is something that low-wealth farmers cannot afford and high-wealth farmers do not want. This result, which does not emerge from the traditional approach to analysis of decision making under risk, has implications for the design and provision of agricultural insurance in the U.S. as well as in developing country settings.”
How Does Crop Insurance Help Farmers and the Economy?
For farmers, purchasing crop insurance offers a financial buffer against weather-related losses, but it also protects farmers against pricing-related losses as well. Even more than that, it can protect others and the economy too.
Crop Insurance in America explains some of the benefits of crop insurance. For example, they cite a study by Farm Credit Services of America that showed 20,900 jobs saved in four states after the 2012 drought and an annual labor income of $721 million protected because farmers were able to recover.
At Broerman Insurance Agency, it is our mission to protect farmers and their livelihoods, and part of the way we do this is through crop insurance. We offer crop insurance and have done so for more than three decades. If you’re not sure which of your crops are insurable, don’t hesitate to reach out. We’ll talk about your situation and let you know which of your commodities qualify as insurable crops.
PHOTO: Pixabay / CC0 Public Domain