22 BULLETIlSr 1043, U. S. DEPARTMENT OF AGRICULTURE. 



before the crop is ready for market are easily translated into terms 

 of dollars by^ means of simple tables showing the cost of each oper- 

 ation ; and the cost of seed and fertilizer, if any, as well as the com- 

 mercial rental value, can no doubt be determined without much dif- 

 ficulty. The plan does not readily lend itself, however, to a dif- 

 ferentiation between good farming and poor farming except as these 

 factors are evidenced by the number of field operations performed. 

 In other words, unless the agent takes great personal care, the farmer 

 who plows, disks, etc., in a slipshod manner, uses inferior seed, and 

 exercises poor judgment in other respects, is likely to receive the 

 same amount of insurance as the farmer who performs all field oper- 

 ations in a first-class manner, uses the best varieties of seed, and exer- 

 cises sound judgment with reference to the time of seeding, caring 

 for, and harvesting his crops. Moreover, while the commercial rental 

 supposedlj^ reflects the productivity of the farm, rents are to a great 

 extent the result of established custom and do not, as a rule, reflect 

 with accuracy the productivity of a given farm. 



The other method, that of average yield and price, has the dis- 

 advantage of being somewhat cumbersome and difficult to apply. 

 Few farmers keep records of their yields from year to year, and 

 without such records few will be able to give with any degreee of 

 accuracy the yield obtained for each of five years past. Further- 

 more, a very considerable percentage of the tenant farmers will not 

 have tilled the farm they occupy for a sufficient number of years 

 to give a reliable average yield. The plan has the merit, however, 

 of measuring past results in so far as it is possible to secure the 

 facts, and these form the most reliable basis for estimating the future 

 results which are the subject of the proposed contract. 



The determination of the amount of insurance an acre to be written 

 is particularly important in the general plan of insurance here con- 

 sidered. In the ordinary insurance contract the amount of insurance 

 placed on the various risks determines the size of the indemnity in 

 case of loss, but does not, barring a moral hazard, affect the number 

 of losses. Under the plan involved in each of the crop insurance 

 contracts hitherto written, however, the insurance an acre determines 

 not only the size of the indemnities that will occur, but also the 

 number of cases in which indemnity will be due. To insure the 

 corn fields in a given State or locality at $24 an acre, or the equiva- 

 lent in a stipulated yield, obviously involves not only twice, but many 

 times, the risk involved in insuring the same fields at $12 an acre. 

 From the farmer's standpoint the chance of collecting all or a part 

 of the second $12 an acre would be several times the probability of 

 collecting any part of the first $12. The wise farmer, therefore, 

 when he buys insurance under this plan, will buy as much an acre 



