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Agriculture 8 Pages

Essay: Federal Crop Insurance Policy


California, like other states, has experienced severe drought recently. Drought is one of the major perils affecting crop production to which farmers are exposed. Depending on various events, California farmers can experience large crop losses.

The government provides certain forms of crop insurance. Research the following items and write a report of your findings supported with relevant research:

1.Describe the federal crop insurance policy that is currently available to farmers. Are there options to add or improve coverage under the policy? 

2.How can a farmer purchase the policy? Can any farmer buy federal crop insurance if the farmer wishes to do so? 

3.What perils are covered by the policy and what perils are not covered? Does the policy provide adequate coverage for most perils that cause crop loss?

4.Do private insurance companies sell any type of crop insurance? If so, are there any differences in the coverage of under the federal program from the coverage available under private programs? 

5.If a farmer does not have a crop insurance policy, are there any other programs that may provide the farmer with financial assistance to recover from crop losses?


Title: Essay: Federal Crop Insurance Policy
Length: 8 pages (2391 Words)
Style: APA


Federal Crop Insurance Policy

Meaning of the Federal Crop Insurance Policy

The Federal Crop Insurance Policy is an alternative for farmers, offering plans of insurance that include Actual Production History (APH), Dollar Plan, Actual Revenue History (ARH), Revenue Protection, Yield Protection, and Revenue Protection with Harvest Price Exclusion. The policy aims at protecting the economic stability of agriculture through a proper system of crop insurance, providing the means of research and experience that is necessary for devising and establishing the insurance (O’Connor, 2013).

Farming has often been referred to as financially risky enterprise, with most of the agricultural production being mainly dependent on variations such as weather, demand, as well as shifts in agricultural supply, which often results in volatile market prices. The development of the policy was as a result of farm financial risks, seasons of low return, and the significance of agriculture in the country’s economy. Currently, the available farm commodity policies trace their roots in 1930, but the farm bill was officially authorized in 2008 (O’Connor, 2013).

The policy has been periodically modified, with the 2008 Farm Bill being among the most recent modified Bill. The Bill was passed after the Congress revised the legislation in the 2008 farm bill so as to achieve budget savings as well as supplementing crop insurance with a permanent program of disaster payment. The program provides producers with tools of risk management that are used in addressing crop yield and the revenue losses in farms. These policies are sold and are completely serviced the involved insurance companies. With the policy, farmers are paid sales commissions by the insurance companies and their losses reinsured by USDA. Also, their administrative and operating costs are compensated and reimbursed by the federal government (Glauber, 2006).


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