UNITED STATES DEPA'RTMENT OF AGRICULTURE 



BULLETIN No. 1043 i 



Contribution from the Office of Farm Management and ^ 



Farm Economics _ 



J^^^^^^i^ G. W. FORSTER, Acting Chief JlV/^^W*-. 



Washington, D. C. ▼ January 23, 1922 



CROP INSURANCE: RISKS, LOSSES, AND PRINCI- 

 PLES OF PROTECTION. 



By V. N. Valgren, Associate Agricidtural Economist. 



CONTENTS. 



' Page. 



The farmer's " Independence " 1 



Meaning of " loss " or " damage " in 



connection with growing crops 2 



Quantitative importance of annual 



damage to farm crops 5 



Page. 



Elimination or reduction of risk 13 



Self-insurance 13 



Insurance by contract 16 



Principles of crop insurance 18 



Summary 26 



THE FARMER'S "INDEPENDENCE." 



The farmer is frequently spoken of as the most independent mem- 

 ber of organized society. Using the word " independent " in its 

 social significance, this characterization is essentially true. Cer- 

 tainly the land-owning farmer is less directly dependent than those 

 who follow commercial or professional pursuits upon the good will 

 of his fellow-men and under less obligation to cater to their whims 

 or prejudices. But though the farmer enjoys a comparatively high 

 degree of independence in his social and business relations, his 

 economic status, to an unusual degree, is directly dependent upon 

 nature. 



The factory, the mill, the store, or the business of the professional 

 man may continue, for a time at least, but little disturbed by adverse 

 weather conditions or other natural agencies that endanger farm 

 crops. Only when these conditions or agencies cause the failure 

 of crops over wide areas are commercial and professional men 

 affected severely. Assuming, however, that the farmer brings to 

 his work reasonable effort and good judgment, favorable action of 

 natural forces and agencies means a large harvest, while adverse 

 action by one or more of them may nullify his best efforts. Exces- 

 sive heat or rain may ruin his planted fields, his gardens, or his 

 orchards, as may also the lack of heat or the coming of drought. 



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