The Importance of Crop Insurance
Crop damage is a natural part of farming on farm land for sale in Florida, and risk management is absolutely necessary to help protect against devastating losses due to this damage. One of the more important risk management tools that is available to farmers is crop insurance. Crop insurance is a helpful tool that mitigates the negative financial impact of stark decreases in the market prices of crops or for the loss of crops due to naturally occurring disasters such as hurricanes, flooding, drought, hail and more. The two main forms of crop insurance are crop yield protection and crop revenue protection.
Crop Yield Insurance
Crop yield insurance, also known as multiple peril crop insurance, is a comprehensive coverage that is based on the production history of a farm and protects against unavoidable yield and/or loss of quality in crops from nearly every naturally occurring disaster including drought, flooding, storm damage, hail, excessively high or low temperatures due to unexpected climate changes, disease, and insects. Crop yield insurance is an essential risk management tool to have for farming on Florida farm land for sale, because it allows farmers to grow crops confidently and with peace of mind.
Crop Revenue Insurance
Crop revenue insurance is a coverage that is based on the farmer’s revenue and covers the decline in revenue caused by a drop in the market prices of the crops that are protected. With crop revenue insurance, payments are based on the revenue that a farm produces. When the average revenue falls below a certain threshold usually due to unavoidable fluctuations in market prices, the insurance will kick in to financially compensate the farmer for their losses.