How Important Is Crop Insurance

How Important Is Crop Insurance

Agriculture is a necessary industry, and one of the only industries completely at the mercy of Mother Nature. 

Disaster’s beyond one’s control can quickly destroy a farmer’s livelihood, and beyond this, the effects can trickle down to local economies and difficult food shortages. For this reason, crop insurance has become a necessity for those in the agriculture industry, allowing them peace of mind in an industry where so much can go wrong very quickly.  

Globally, as much as 70% of all land on earth is used for agricultural purposes  

Forestry, rangeland, and growing crops just a few of the main uses. In the decade between 2003 and 2013, more than 78 disasters occurred with a total economic damage amounting to $1.5 trillion.  

5 Impacts of Natural Disasters On The Agricultural Industry  

For the agricultural industry, there are some obvious impacts and some that may not be so obvious until it happens to you. 5 well and lesser-known impacts of natural disasters on the agricultural industry are:  

Long-term loss  

Well established and healthy perennial crops take some time to reach full maturity in many cases. Once these crops are gone, so are the fruits they yield and one must start all over again before a new set of crops begins yielding again. Natural disasters can destroy these crops and cause long-term yield loss in Stratford 

Long and short-term loss of land  

In cases of flooding, the land becomes entirely unusable until flood waters fully recede, and even after the fact, farmers may need to wait until the land dries out before it can be managed again.  

Permanent salinity increase  

In some flood instances, the salinity of the soil can be permanently changed, rendering the land now unsuitable for farming. This can compromise a farmer’s complete livelihood, leaving them with acres of land they can no longer use.  

Decreased production  

In years of dryness, drought, or after a disaster, farmers may experience decreased production. Not only does this decrease the farmer’s income, but it decreases the amount of yield they may offer to those who wish to have their goods in Stratford 

Increase in unemployment  

Rural communities around the world rely on farming to make a living. With a loss of land or loss of yield, those working on the farm are left out of a job, making a dramatic negative impact on local economies like in Stratford 

What Is Crop Insurance and What Does It Do?  

Essentially, crop insurance works to assists in stabilizing crop production, and balances out the negative impacts that may be felt by farmers. The insurance helps farmers to embrace new farming technologies to mitigate risks, and if the new technologies fail, the farmer will not have to be negatively impacted by that loss. Farmers can use this type of insurance to manage their yield and price risks, allowing them to conduct their work more confidently. If crop insurance is something that could be used on your farm, contact Broken Spoke Insurance today to learn more. 

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