Crop Insurance systems
Crop insurance is a type of protection policy that covers agricultural producers against unexpected loss of projected crop yields or profits from produce sales at market.
Crop insurance is divided into two categories: crop-yield and crop-revenue. Crop-yield insurance protects the expected revenue due to unexpected yields, which is the volume of a crop’s harvest. Crop-revenue insurance covers expected revenue from loss owing to market fluctuations of crop selling prices. Both types of insurance are a means to aid in disaster recovery for producers due to unexpected events.
Causal factors covered under crop-yield insurance could include natural disasters like fire, drought, or flooding with the intention of protecting producers against yield or entire crop loss. Crop-revenue insurance can cover a producer from unexpected fluctuations in the selling price resulting from reduced demand, bad publicity or a bumper crop resulting in a flooded market that reduces selling prices. However, technological advances in agri-tech like precision agriculture and agbots have begun to transform the crop insurance industry as producers are able to collect data and monitor their crops better than ever before.