Crop insurance

Wisconsin farmers have increasingly been using cover crops, in part because of the agronomic benefits cover crops can provide. Crop insurance policies include several management rules, including some that pertain to cover crops. Farmers should always communicate with their crop insurance agent, who should know these rules and can tell a farmer whether or not a specific practice will affect insurability.

Crop insurance

President Trump proposed several changes to reduce its cost in his Fiscal Year budget. Crop insurance the subsidy rate may reduce share of acres insured and thus conflict with this policy goal. To provide one perspective, historical trends are examined for insured acres and premium subsidy aggregated across barley, corn, cotton, oats, peanuts, rice, sorghum, soybeans, and wheat.

Insurance contracts have existed for these crops sincethe first year electronic data are available from the U. A strong relationship exists. During this period, the farm bill authorized enterprise insurance for all acres of a crop in a county.

The increase in subsidy rate since the farm bill likely reflects farms buying the more subsidized enterprise insurance. Farms could also be buying more subsidized lower coverage levels, but average coverage level bought for the 9 crops has generally increased slightly or remained stable over the last few years.

Click Image to Enlarge Historical Perspective — Acres Insured Acres insured grew from 96 to million between and for the 9 crops see Figure 2. Insured acres peaked at million in anddeclining to million in or about the same as in Click Image to Enlarge Click Image to Enlarge Relationship between Insured Acres and Premium Subsidy A linear regression line was estimated with share of acres insured regressed on share of premium subsidized by the federal government.

A strong relationship exists see Figure 4.

Saskatchewan Crop Insurance Corporation | SCIC

A squared subsidy term was added to the linear regression to assess if a nonlinear relationship existed. It was significant with In economic language, the share of acres insured was elastic in its response to the premium subsidy rate see data note.

Another potential issue is that reducing the federal premium subsidy rate may affect different crops differently. This issue will be examined in a future article.

The current Federal subsidy rate for crop insurance is an outcome of the political market place, not an objective economic method. Given a non-trivial conflict with passionate advocates on both sides, a compromise approach may be to reduce the aggregate insurance program subsidy rate by a small amount per year over the life of the farm bill, then assess what has transpired before the next farm bill.

Crop Insurance Plans

This approach of small annual reductions would generate cost savings, allow farmers time to adjust gradually, and most importantly allow for research to assess its impact before deciding to make additional cuts, restore existing cuts, or make no further changes. A slow, measured research informed approach would allow untoward consequences to be minimized, but also not stand in the way of change should change be the choice of the political market place.Protecting more than million acres of American farmland.

Crop insurance supports the American farmer, the American economy, and the American family. More than 90% of insurable farmland in the United States is now protected through the federal crop insurance program. Why it's Essential Crop insurance is essential to the success of farmers and the country.

Why It Matters Crop insurance supports the American farmer, the American economy, and the American family. How it Works Learn about. What GAO Found. The cost of the federal crop insurance program and farm sector income and wealth grew significantly from through The cost of crop insurance averaged $ billion a year from fiscal years through , but it increased to $ billion a year for fiscal years through Crop Returns by Actual County Yields Chart Premium Cost by Coverage Levels Chart Premium Cost by Underlying Insurance Plan Chart.

What is Crop Insurance? History. Because of the inherent risks and potential for widespread catastrophic losses associated with agricultural production, insuring farmers and ranchers has always posed a challenge.

Policies typically consist of general crop insurance provisions, specific crop provisions, policy endorsements and special provisions.

Crop insurance

See RMA's county crop program listings for information about crop policies available in specific counties and states.

Crop insurance is good for farmers, but not always for the environment