Farming is one of the most profitable investments since it has huge returns gained for a very small time. But, risks in farming are a multiplicity. As we were aware that Farmers have to face a number of risks due e.g. extreme weather conditions, price liberalization, the occurrence of diseases in food material, and different types of plant diseases. For the sake of safety, farmers take farming insurance to protect their investments. At the same time, however, also the insurance possibilities to cope with risks increase. There are various insurance companies offering such services to farmers.
Farming Insurance plays an essential role in managing risk for the modern American farmer. Agriculture insurance is one of the important parts of investment and it will protect against either the loss of crops due to natural disasters, such as hail, dryness, and surges, or the loss of revenue due to declines in the prices of agriculture commodities. The Farmers who procure agriculture insurance policies protect against any misfortune in the future. There are two types of crop insurance in the United States, namely multiple peril crop insurance (MPCI) and crop-hail insurance.
Types of Crop Insurance
- Multiple Peril Crop Insurance (MPCI)
MCPI is one of the oldest and most common forms of federal crop insurance in the United States of America. MPCI protects against crop yield losses by allowing participating producers to Insure a certain percentage of historical crop production
- Crop-Hail
Crop-hail insurance is a type of insurance that provides coverage for damage and destruction by hail and fire.
The Benefits of Agriculture Insurance for Farmers
- Stability in Income
- Minimal Debts
- Technological Advancement
- Farmers can repay loans in periods of crop failure.
- Co-operatives and other Investment Institutions have the confidence to lend to farmers.
- Food Inflation could be kept well in control.
- Yield Protection
- Provides Awareness
- Crop insurance ensures establishment in farm income.
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