Importance of Crop Insurance and Its Advantages
70% of the global land is put to agricultural use, forestry and rang land. In Africa for example, agriculture is the source of 70 percent of full time employment, 33 percent of the gross domestic product and 40% of total export earnings.
78 calamities were experienced between the year 2003 and 2013 cause by various types of natural perils some of which include climate related events. Since the 1980’s this number has since doubled. In a span of 10 years, it has affected close to 9 billion individuals and caused over USD 494 billion in calculable harm.
Some of the other impacts of natural calamities to farmers include:
- Reduced number of perennial crops such as rhubarb, banana and garlic.
- In the case that flooding occurs, land cannot be cultivated until water levels subside.
- An increase in salinity that makes the land unsuitable for crop production.
- Farmers’ income reduces due to a reduction in production.
- Rural livelihood is threatened due to increased unemployment.
Definition of Crop Insurance
Due to an increase of calamities that are beyond a farmer’s control, it is necessary for a farmer to take precautionary measures to control the damage they might face. A crop insurance plan ensures that the stabilization of crop production is in place as well as reducing the negative effects of calamities to a farmer. The rapid advancement in farming technology has also necessitated crop insurance to manage the risks that may come due to the failure of such technology.
Advantages of Crop Insurance
When a farmer adopts crop insurance they protect their crop from unforeseen challenges. Some of these advantages are:
- Stable income. It assures stable income for the farmer as it protects the farmer from inevitable losses that may be suffered by crop failure. It also helps the farmer to manage the produce and risks from fluctuation of market prices.
- Minimal Debts. With the aid of the appropriate insurance partner a farmer has the ability to repay loans and debts even when suffering from crop failure.
- Advancement in technology. Insurance companies partner with Agro platforms to ensure that farmers risk of loss is reduced and both quality and quantity of produce is improved.
- Produce protection. When farmers face loss of yields crop insurance ensures such risks are compensated. It also offers the farmer preventive farming and replant security.
- Creating awareness. Through awareness campaigns conducted by insurance companies, farmers understand the impact of natural calamities and are educated on protecting their farms.
Low income farmers with limited means are mostly devastated when natural disaster strikes. The need of purchase of a crop insurance plan will ensure compensation and state of the art technology and financial services that are crucial for the success of a farmer. Crop insurance also ensures that a farmer attains self-sufficiency and may not need to seek financial aid. It will also ensure the quality and quantity of produce is high.
Farmers who come across this article will understand the necessity of adopting a crop insurance policy that will ensure your success and happiness.