CROP INSURANCE : RISKS, LOSSES, ETC. 13 



ELIMINATION OR REDUCTION OF RISK. 



SELF-INSURANCE. 



While the individual farmer can not control the action of the 

 weather or the elements, and frequently finds himself unable to com- 

 bat the attacks of plant disease and insect pests, he can to a great 

 extent reduce the losses that would result from the absence of proper 

 care and forethought. In farming, as well as in other lines of activity, 

 the old advice against putting all the eggs in one basket should be 

 heeded as far as practicable. The single-crop farmer exposes himself 

 to the possibility of losing the results of an entire year's work from a 

 single catastrophe. Almost any one of the causes of crop damage 

 enumerated in foregoing Tables 1, 2, and 3 may make his year's work 

 a total loss. If, on the other hand, he invests part of his capital and 

 labor in live stock, or in a variety of crops other than the main money 

 crop of the region, it i^ highly improbable that the causes of loss 

 affecting one of his investments will also seriously affect the others. 

 The same plant diseases and insect pests rarely, if ever, affect all 

 crops that can be grown in a given locality, and even damage from 

 climatic causes, such as drought, excessive moisture, frost, or hail, 

 rarely brings about a total destruction of all crops in a region. While 

 all the crops in a given locality may be affected to some degree by 

 each of these climatic contingencies, they probably will not be equally 

 subject to damage from a given cause at the same time. In other 

 words, the chances are that the critical period of one crop with refer- 

 ence to any one of these hazards will be past before the corresponding 

 period of another crop is reached. Diversification, therefore, becomes 

 a form of self -insurance. 



The added safety to the farmer that lies in reasonable diversifi- 

 cation of crops and products is becoming recognized to an increas- 

 ing extent by country bankers, as well as by the farmers themselves. 

 Many bankers in regions where a one-crop system has prevailed now 

 insist as a condition to the granting of a loan to the farmer that he 

 shall fill out and sign a credit statement, including an agreement to 

 use a safe cropping system. This change of attitude on the part 

 of banking interests, from one of encouraging the farmer to stake 

 his success on a single crop to a position of urging him to play 

 safe in so far as circumstances permit, represents an important 

 advance in profitable relationship between the banker and the farmer. 



A study of available information covering dates of the last kill- 

 ing frost in the spring and of the first killing frost in the fall, as 

 well as that bearing on seasonal rainfall and temperature for his 

 locality, will enable the farmer, within limits, to adjust the plant- 

 ing and hence the growing season of his crops in such a way as 

 to incur a minimum of risk from these causes of crop damage. In 

 78632—22 3 



