Crop insurance can be a tool for farmers to add to their arsenal as they look to manage risk in a business often fraught with risk.

Crop insurance can come in a number of forms. Some are yield related while others protect revenue, said Jerry Skees, a University of Kentucky College of Agriculture risk management and policy researcher.

“There’s all kinds of choices,” he told farmers attending the recent Ag Expo in Owensboro. “And there’s a lot of action in new product development.”

Skees is a member of a task force that is reviewing some of the new products for the Federal Crop Insurance Corporation. 

He encourages farmers to think about what some of the important considerations are in developing a plan for using crop and revenue insurance in their operations as part of their risk management strategy.

Other risk management tools can include product diversification, irrigation and pricing strategies using futures and other marketing opportunities.

Yield products can be based on farm level down to unit level (sub parcels) yields as well as a county base or group risk program, he said. Revenue insurance plans incorporate both yields and prices and can be figured at whole farm or sub parcels. Within these two general categories are several types of insurance programs, including special revenue products that facilitate pricing products before harvest.

Determining what type of insurance product a farmer needs must be based on an individual’s tolerance for risk, what kind of risk a person is willing to accept and their amount of diversification. Government subsidies are available on most of these insurance programs.

“I encourage farmers to talk to their insurance sales agents,” he said. “Sometimes they don’t have the whole portfolio in from of them. If there’s a product you want to know more about ask them.”