July 21--Most people have insurance to cover their vehicles, homes and businesses to provide financial help in a disaster, Indiana farmers are no different.
Most Indiana farmers take part in a federal program that provides crop insurance, which helps offset the cost of planting at times of natural disasters.
Jim Rink, director of Farm and Crop Insurance for Indiana Farm Bureau Insurance, said that in 2011 crop insurance covered 74 percent of the corn acres and 72 percent of the soybean acreage in the state.
"It covers the cost of putting a crop in the field," Rink said, "but there is no profit. Farmers getting by from year to year will have to rely on a loan. Crop insurance keeps a farmer in business."
He said there are two types of crop insurance available, one that covers the loss of yield and the second based on price protection.
"Yield insurance covers up to 85 percent of the value of the crop," Rink said. "It's based on the actual product history. For farmers that keep track of their annual yield the insurance covers the actual yield amount, if the yield is not tracked we use a county average."
Price protection is based on the price as of March 15, which is the final date to purchase insurance, he said.
"It guards against the price going down," Rink said. "The range of coverage is 50 to 75 percent of the price decline."
Corn that was selling for $5.68 per bushel in March is selling at more than $8 per bushel for delivery in September, a record. Soybeans reached a record $17.71 per bushel Friday on the Chicago Board of Trade.
The price for yield insurance is approximately $25 and for yield and price protection can run as high as $125 per acre.
Rink said because crop insurance is a federal program, farmers cannot be denied insurance, and all companies are required to sell insurance at the same rate.
He said Indiana has experienced dry years in the past, most recently in 2002 and 2004.
"The program was started 15 to 20 years ago and was not a very successful program," Rink said. "It has really developed into an important risk management program for farmers in recent years."
Tipton County farmer Kip Bergman said he didn't purchase crop insurance for 2012, but did carry it in the past.
"It probably would have been good to have it this year," he admitted. "Normally we always get a good crop in Tipton County because the soils are so good.
"There have been droughts in 1987, 1988 and 1991," Bergman said. "I lived through it before. The commodity prices this year are going to increase."
Howard County farmer Dick Miller said he has disaster insurance this year on some fields.
"It's based on what your production is," he said. "It's tough to collect on."
Miller said the crop insurance will cover the cost of planting a crop, but that there is no profit for the farmer.
"If you have a good relationship with a banker, you can borrow the money to make it through until the next year," he said.
(c)2012 the Kokomo Tribune (Kokomo, Ind.)
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