18 BULLETIN 1043. XJ. S. DEPABTME3JT OF AGRICULTUBE. 
in question plus an allowance for seed and for rental value of the 
land. Unlike the contract described above, the policy does not 
place a fixed value on the grain harvested, but provides instead 
for valuation on the basis of market price at the time of adjustment. 
The company, therefore, in effect, gives protection against a drop in 
prices, as well as against crop damage. This feature of the policy 
caused the venture to prove a costly one to the company in 1920 be- 
cause of the unexjueetedly heavy drop in prices. 
A crop policy even more recently devised involves a plan materially 
different from either of those already described. The coverage as to 
hazards insured against is. however, practically the same as in the 
contract just outlined. In neither of these policies is the hail hazard 
covered. Under the plan embodied in this policy, however, the 
amount of insurance to the acre that an applicant may receive is 
based on a certain percentage of his average yield during the past 
five years, such part of the average yield being translated into dollars 
by applying to it a value per bushel or other proper unit of measure 
based on the price prevailing during the period in question. Thus a 
farmer who on a given farm during the past fh*e years has averaged 
1-8 bushels of corn an acre may be offered insurance in an amount equal 
to the value of about 36 bushels at the average price for corn during 
the past five years. If such average price were found to be 50 cents a 
bushel the insurance might be placed at 818 an acre. 
One of the most important differences between this policy and 
either of those previously described is the plan provided for settle- 
ment of losses. In the case of total destruction of the insured crop 
the company agrees to pay 75 per cent of the cost of the field opera- 
tions actually performed, such indemnity not to exceed 75 per cent 
of the total insurance carried. Furthermore, it is provided that the 
indemnity shall in no case exceed the cost of replacing all or any part 
of the quantitative returns on which the insurance is based with prod- 
ucts of like kind and sound quality. Finally, it is provided that in- 
demnity shall in no case exceed the amount, if any. by which the 
amount insured exceeds the market value of the crop harvested. 
Under this provision a change in price in either direction may be 
taken advantage of by the company. 
PRINCIPLES OF CROP INSURANCE. 
The need of the farmer is a form of insurance that (1) will safe- 
guard him as far as practicable against all unavoidable losses which 
would seriously cripple him. and (2) can be obtained at a cost or 
premium which he can afford to pay. 
This means, in the first place, that the protection must be limited 
to actual loss of a material part of the investment in a crop, reason- 
able compensation for the f araier's labor, and a fair rental of the land 
