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Farming is possibly the riskiest occupation possible. Farmer insurance acts as protection and stability in case of not only accident, but loss. For instance, crop insurance is a must to protect against the loss of your livelihood. Accidents and weather are notorious for adversely effecting crops. If crops are destroyed or output is low, farmer insurance will aid in this financial burden. Thankfully the government took measures to protect farmers by helping to develop the availability of farmer insurance. The Government's Role In Farmer's Insurance In 1938, the Federal Crop Insurance Corporation was formed. The government helped form this program to help farmers after the Great Depression. The Great Depression was devastating to farmers and this government program helped farmers get back into the game. However, in 1980 with the Federal Crop Insurance Act the Federal Crop Insurance Corporation was completely altered. The point of the additional insurance act in 1980 was to include even more crops and growing areas. In 1994 the government further expanded its farmer insurance acts with the Federal Crop Insurance Reform Act. This act helped address the ad hoc bills that had been passed, which helped farmers from crop failure due to drought and rain. The government tried to make farmer insurance mandatory, but in 1996 this stipulation was let go. Private versus Government Farmers Insurance The Risk Management Agency was created in 1996 to act as an authority to agree to contracts with private insurance companies. The RMA was established in 1996, but the government did not allow private companies to offer farmer insurance until 2000. The RMA researches and develops programs that are suitable as farmer insurance. The RMA acts as a reviewer of farmers insurance policies developed by third parties. Not only do they review policies, but they help to make sure that farmers are able to get insurance each year. Policies are renewed each year automatically. Even when a farmer purchases insurance through a private company, the policy is still underwritten by the government. How Farmers Insurance Differs by State Different states grow different crops and therefore diverse insurance needs. Each state carries farmers insurance geared toward these needs. If crops are grown in northern states, frost damage is a concern. The same goes for southeaster states. The very southern states are known to have hurricane occurrences. Every state carries farmer insurance that covers farmers in case of crop loss due to a downfall in market prices. If insurance was not available, business would be difficult to continue from one year to the next. Summary: Farmer Insurance is most necessary for anyone who owns a farm. Unforeseen forces cause many losses each year. Crop damage is considered a loss either weather damage or lowering market prices. Insurance is a means of protection that allows farmers to continue year after year despite crop ruin. The government has long had an active roll in developing insurance products for farmers in all states.
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