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Farmers Can Save Money on Crop Insurance Premiums

February 25, 2010
By: Sara Schafer, Farm Journal Media Business and Crops Editor

Rachel Duff, Top Producer Contributing Editor

In an economy with a stress on saving money, many people are looking for ways to save their cash. Farmers can save money in 2010 with their crop insurance because of new changes to the ruling.

The largest change has been with regard to unit choices, which is how the land is insured, says Gary Hachfeld, educator in agricultural business management with the University of Minnesota. By complying with the 20/20 rules, farmers can reduce insurance costs with enterprise units. If the farmer is crossing section lines or farms in at least two sections or units in a county, they qualify for the savings, but at least 20 acres or 20% of the acres they plant in that county must be that crop. Using the ruling on enterprise units, the farmers reduce their crop insurance premiums for Crop Revenue Coverage (CRC) and Revenue Assurance (RA), or they can buy higher levels of protection for their crops for the same premium.
The changes in the enterprise rules give farmers a huge opportunity to reduce premium costs, which can greatly aid them in saving money, Hachfeld says. Farmers can reduce their premium costs for CRC 61% for corn at 80% coverage level and 57% for soybeans at 85% coverage level if they elect enterprise units and farm more than 550 acres. If the farmer is electing for RA coverage and planting in two different sections, the percent reductions are estimated to be between 38% to 49%, he says. For RA, the percent premium reduction increases as the number of sections the farmer plants increases, and for CRC, as the number of acres increase, the percent reduction of the premium goes up.
Farmers must request for enterprise units by March 15, but if the farmer does not meet the 20/20 rule after the fields are planted, the insurance coverage reverts to basic units, not optional units, Hachfeld says. The new rules can help farmers save money in 2010, but the rules are detailed and should be read and implemented carefully to make sure the crops qualify.

You can e-mail Rachel Duff at

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