Why Consider Crop Insurance?

Jake Jacobs, UVM Agricultural Risk Management Education Coordinator

The immediate answer to the question – why consider crop insurance –  is simple: agricultural production is risky business.

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In the wake of Hurricane Irene, Vermont, 2011, Photo Credit: Flickr, Carosauros

If weather were more predictable, agricultural producers would have no problem planning for difficult production years. But of course, that’s not the case. And it is not only major catastrophic events like Hurricane Irene in 2011 that cause losses.

Crop insurance provides a safety net against perils such as frost, drought, flooding and hail. The chart below illustrates the causes of agricultural losses in Vermont due to weather events since crop insurance was first available to Vermont farmers and growers in 1990.

In 2016, crop insurance protected $27 million of liability on growing crops in Vermont. There were 73,000 acres insured and more than $880,000 was paid to farmers in indemnities for production and/or revenue losses.

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Causes of Agricultural Losses in Vermont from 1990 until 2016, Source: Mary Staak, USDA RMA

Do you need crop insurance? The best way to determine your need for crop insurance coverage is to assess your level of risk, working with a USDA-licensed insurance agent. To find an agent, visit your local FSA office or go to Risk Management Agency’s agent locator.

Without a strong crop insurance program, uncontrollable weather events can undermine the financial security of individual farmers and could potentially place an enterprise or even an entire agricultural sector in jeopardy. And the business and financial impact of agriculture is important to Vermont’s economy. In 2015 Vermont’s agriculture industry contributed more than $940 million to the state’s economy.

Buying a crop insurance policy is a risk management tool available to Vermont farmers. Producers should consider how a policy will work with their other risk management strategies to insure the best possible outcome each crop year. Crop insurance agents and other agri-business specialists can assist farmers in developing good risk management plans for their unique agricultural enterprises.

USDA is an equal opportunity provider and employer.

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About Suzy Hodgson

Suzy works on and writes about issues at the intersections of risk, climate, economics, farming, food, waste, and energy. She is based at UVM Extension's Center for Sustainable Agriculture.
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