Federal crop insurance offers a variety of insurance for farmers. There are multiple programs to choose from, depending on the types of crops you grow and where you farm. You don’t buy the insurance directly from the federal government. Instead, you buy it from approved insurance agents.
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Keep reading to learn more about this lucrative program.
Crop Insurance History
Crop insurance first began after the Great Depression. It was created in an effort to help rebuild the farming community. Initially, only major crops were covered and only in limited areas. It wasn’t until 1980 that crop insurance became a part of the law with the
Federal Crop Insurance Act of 1980.
It wasn’t until 1994 that federal crop insurance became what it is today, though. Until that point, the federal government still had to step in and provide relief to farmers that realized destruction. The repeated attempts at providing relief led to the Federal Crop Insurance Reform Act of 1994.
It was at this time that the insurance became mandatory for farmers. It was the only way for farmers to obtain deficiency payments and even help with certain types of funding. This is when catastrophic coverage began. Since that time, the federal crop insurance program has grown and is now better than ever.
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The Federal Crop Insurance Plans
Federal crop insurance provides you with a variety of different options, including:
- Multi-peril Crop Insurance – This covers many perils that can occur on a farm. In general, the insurance covers loss of production. It may also cover drastic market price changes and adverse weather conditions that make it impossible to plant crops.
- Actual Production History – This coverage provides you with a yield that the insurer bases off your past production. The plan protects you against almost any peril imaginable.
- Actual Revenue History – This protection bases your coverage on your revenue history. If your revenue falls below this amount for a particular crop, your insurance would cover the loss.
- Yield Protection – This protection works much the same as the Actual Production History plan, but is only for crops that have Revenue History protection. It protects you against a loss of production.
- Revenue Protection – This coverage protects you against a loss of revenue due to fluctuating prices, whether increasing or decreasing.
- Area Plans – This protects you in the event that there is a countywide problem with a particular crop. Your protection is based on the percentage of the expected yield. If the county yield doesn’t meet the expected numbers, you can receive compensation.
You can find Federal Crop Insurance by shopping around with federally approved agents. You can find a list of approved agents
here. As with any other type of insurance, make sure you shop around to find the lowest premiums for the protection that you need..
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